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.
As of Mar. 2024, Bread Financial Holdings has a Sloan Ratio of -0.03%, indicating the company is in the safe zone and there is no funny business with accruals.
Bread Financial Holdings Sloan Ratio % Historical Data
* 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.
Competitive Comparison of Bread Financial Holdings's Sloan Ratio %
For the Credit Services subindustry, Bread Financial Holdings'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.
Bread Financial Holdings's Sloan Ratio % Distribution in the Credit Services Industry
For the Credit Services industry and Financial Services sector, Bread Financial Holdings's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Bread Financial Holdings's Sloan Ratio % falls into.
Bread Financial Holdings Sloan Ratio % Calculation
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.
Bread Financial Holdings's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Bread Financial Holdings's Net Income for the trailing twelve months (TTM) ended in Mar. 2024 was 48 (Jun. 2023 ) + 171 (Sep. 2023 ) + 43 (Dec. 2023 ) + 134 (Mar. 2024 ) = $396 Mil.
Bread Financial Holdings's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2024 was 343 (Jun. 2023 ) + 629 (Sep. 2023 ) + 617 (Dec. 2023 ) + 447 (Mar. 2024 ) = $2,036 Mil.
Bread Financial Holdings's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2024 was -281 (Jun. 2023 ) + -281 (Sep. 2023 ) + -1791 (Dec. 2023 ) + 720 (Mar. 2024 ) = $-1,633 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.
Bread Financial Holdings (NYSE:BFH) 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.
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 Mar. 2024, Bread Financial Holdings has a Sloan Ratio of -0.03%, indicating the company is in the safe zone and there is no funny business with accruals.
Bread Financial Holdings Sloan Ratio % Related Terms
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Bread Financial Holdings (Bread Financial Holdings) Business Description
Formed by a combination of JCPenney's credit card processing unit and The Limited's credit card bank business, Bread Financial is a provider of private label and co-branded credit cards, loyalty programs, and marketing services. The company's most financially significant unit is its credit card business that partners with retailers to jointly market Bread's credit cards to their customers. The company also retains minority interest in its recently spun-off LoyaltyOne division, which operates the largest airline miles loyalty program in Canada and offers marketing services to grocery chains in Europe and Asia.
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