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Richard Sloan from the University of Michigan was first to document what is referred to as the "accrual anomaly". His 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones.
Archer Aviation's Sloan Ratio for the quarter that ended in Dec. 2023 was -109.51%.
Warning Sign:
When sloan ratio (-109.51)% higher than 25% or lower than -25%, earnings are more likely to be made up of accruals.
As of Dec. 2023, Archer Aviation has a Sloan Ratio of -109.51%, indicating earnings are more likely to be made up of accruals.
The historical data trend for Archer Aviation's Sloan Ratio % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Archer Aviation Annual Data | |||||||||
Trend | Dec20 | Dec21 | Dec22 | Dec23 | |||||
Sloan Ratio % | -0.24 | -30.70 | 60.54 | -109.51 |
Archer Aviation Quarterly Data | ||||||||||||||
Sep20 | Dec20 | Mar21 | Jun21 | Sep21 | Dec21 | Mar22 | Jun22 | Sep22 | Dec22 | Mar23 | Jun23 | Sep23 | Dec23 | |
Sloan Ratio % | Get a 7-Day Free Trial | 60.54 | 3.40 | -47.37 | -119.72 | -109.51 |
For the Aerospace & Defense subindustry, Archer Aviation's Sloan Ratio %, along with its competitors' market caps and Sloan Ratio % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
For the Aerospace & Defense industry and Industrials sector, Archer Aviation's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Archer Aviation's Sloan Ratio % falls into.
Earnings contain a lot of non cash earnings which is called accruals. The Sloan ratio is a way to identify firms with low non-cash or accrual-derived earnings relative to their cash flow.
Archer Aviation's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Sloan Ratio | = | (Net Income (A: Dec. 2023 ) | - | Cash Flow from Operations (A: Dec. 2023 ) |
- | Cash Flow from Investing (A: Dec. 2023 )) | / | Total Assets (A: Dec. 2023 ) | |
= | (-457.9 | - | -271.6 | |
- | 420.7) | / | 554.3 | |
= | -109.51% |
Archer Aviation's Sloan Ratio for the quarter that ended in Dec. 2023 is calculated as
Sloan Ratio | = | (Net Income (TTM) | - | Cash Flow from Operations (TTM)) |
- | Cash Flow from Investing (TTM)) | / | Total Assets (Q: Dec. 2023 ) | |
= | (-457.9 | - | -271.6 | |
- | 420.7) | / | 554.3 | |
= | -109.51% |
Archer Aviation's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was -113.1 (Mar. 2023 ) + -184.1 (Jun. 2023 ) + -51.6 (Sep. 2023 ) + -109.1 (Dec. 2023 ) = $-457.90 Mil. Archer Aviation's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was -63.7 (Mar. 2023 ) + -57.1 (Jun. 2023 ) + -66.8 (Sep. 2023 ) + -84 (Dec. 2023 ) = $-271.60 Mil. Archer Aviation's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was 302.6 (Mar. 2023 ) + 142.9 (Jun. 2023 ) + -15.8 (Sep. 2023 ) + -9 (Dec. 2023 ) = $420.70 Mil.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Archer Aviation (NYSE:ACHR) Sloan Ratio % Explanation
A former University of Michigan researcher, Richard Sloan's 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones. In fact, for the 40-year period between 1962 and 2001, buying the lowest accrual companies and shorting the highest accrual companies resulted in an average annual compounded return of 18%, more than double the S&P 500's 7.4% annual return over the same period.
According to How to Beat the Market with the Sloan Ratio:
If the Sloan Ratio is between -10% and 10%, the company is in the safe zone and there is no funny business with accruals.
If the Sloan Ratio is less than between -25% and -10% on the negative side, and between 10% and 25% on the positive side, this is a warning stage of accrual build up.
If the Sloan Ratio is less than -25% or greater than 25%, and this ratio is consistent over several quarters or even years, be careful. Earnings are highly likely to be made up of accruals.
As of Dec. 2023, Archer Aviation has a Sloan Ratio of -109.51%, indicating earnings are more likely to be made up of accruals.
Thank you for viewing the detailed overview of Archer Aviation's Sloan Ratio % provided by GuruFocus.com. Please click on the following links to see related term pages.
Tosha Perkins | officer: Chief People Officer | 757 N. ELDRIDGE PARKWAY, HOUSTON TX 77079 |
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N.v. Stellantis | 10 percent owner | TAURUSAVENUE 1, HOOFDDORP P7 2132LS |
Thomas Paul Muniz | officer: Chief Operating Officer | C/O ARCHE AVIATION INC., 1880 EMBARCADERO ROAD, PALO ALTO CA 94303 |
Fca Foreign Sales Holdco Ltd. | 10 percent owner | PINLEY HOUSE, 2 SUNBEAM WAY, CONVENTRY, WEST MIDLANDS X0 CV3 1ND |
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Fca Italy S.p.a. | 10 percent owner | CORSO GIOVANNI AGNELLI 200, TURIN L6 10135 |
Fca Us Llc | 10 percent owner | 1000 CHRYSLER DRIVE, AUBURN HILLS MI 48326 |
Fca North America Holdings Llc | 10 percent owner | 1000 CHRYSLER DRIVE, AUBURN HILLS MI 48326 |
Brett Adcock | 10 percent owner | C/O ARCHER AVIATION INC., 1880 EMBARCADERO ROAD, PALO ALTO CA 94303 |
Deborah Diaz | director | 6830 OLD DOMINION DRIVE, MCLEAN VA 22101 |
Mark Mesler | officer: Chief Financial Officer | C/O ARCHER AVIATION INC., 1880 EMBARCADERO ROAD, PALO ALTO CA 94303 |
Michael Spellacy | director | 399 PARK AVENUE, NEW YORK NY 10022 |
Fred M Diaz | director | 9614 AMALFI CT, BRENTWOOD TN 37027 |
Adam D Goldstein | director, officer: Co-Chief Executive Officer | C/O ARCHER AVIATION INC., 190 TASMAN DRIVE, SAN JOSE CA 95134 |
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