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.
Carpenter Technology's Sloan Ratio for the quarter that ended in Dec. 2023 was 1.30%.
As of Dec. 2023, Carpenter Technology has a Sloan Ratio of 1.30%, indicating the company is in the safe zone and there is no funny business with accruals.
Carpenter Technology Sloan Ratio % Historical Data
The historical data trend for Carpenter Technology'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.
Competitive Comparison of Carpenter Technology's Sloan Ratio %
For the Metal Fabrication subindustry, Carpenter Technology'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.
Carpenter Technology's Sloan Ratio % Distribution in the Industrial Products Industry
For the Industrial Products industry and Industrials sector, Carpenter Technology's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Carpenter Technology's Sloan Ratio % falls into.
Carpenter Technology 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.
Carpenter Technology's Sloan Ratio for the fiscal year that ended in Jun. 2023 is calculated as
Carpenter Technology's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was 18.6 (Mar. 2023 ) + 38.4 (Jun. 2023 ) + 43.9 (Sep. 2023 ) + 42.7 (Dec. 2023 ) = $144 Mil.
Carpenter Technology's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was 4.3 (Mar. 2023 ) + 174.9 (Jun. 2023 ) + 7.4 (Sep. 2023 ) + 14.5 (Dec. 2023 ) = $201 Mil.
Carpenter Technology's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -20.5 (Mar. 2023 ) + -30.8 (Jun. 2023 ) + -22 (Sep. 2023 ) + -25.3 (Dec. 2023 ) = $-99 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.
Carpenter Technology (NYSE:CRS) 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 Dec. 2023, Carpenter Technology has a Sloan Ratio of 1.30%, indicating the company is in the safe zone and there is no funny business with accruals.
Carpenter Technology Sloan Ratio % Related Terms
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Carpenter Technology (Carpenter Technology) Business Description
Carpenter Technology Corp supplies specialty metals to a variety of end markets, including aerospace and defense, industrial machinery and consumer durables, medical, and energy, among others. The company's segment includes Specialty Alloys Operations and Performance Engineered Products. It generates maximum revenue from the Specialty Alloys Operations segment. The SAO segment is comprised of the company's major premium alloy and stainless steel manufacturing operations. This includes operations performed at mills primarily in Reading and Latrobe, Pennsylvania, and surrounding areas as well as South Carolina and Alabama.
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