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.
Gates Industrial's Sloan Ratio for the quarter that ended in Dec. 2023 was -2.29%.
As of Dec. 2023, Gates Industrial has a Sloan Ratio of -2.29%, indicating the company is in the safe zone and there is no funny business with accruals.
Gates Industrial Sloan Ratio % Historical Data
The historical data trend for Gates Industrial'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 Gates Industrial's Sloan Ratio %
For the Specialty Industrial Machinery subindustry, Gates Industrial'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.
Gates Industrial's Sloan Ratio % Distribution in the Industrial Products Industry
For the Industrial Products industry and Industrials sector, Gates Industrial's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Gates Industrial's Sloan Ratio % falls into.
Gates Industrial 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.
Gates Industrial's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Gates Industrial's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was 26.4 (Mar. 2023 ) + 64.9 (Jun. 2023 ) + 78.7 (Sep. 2023 ) + 62.9 (Dec. 2023 ) = $233 Mil.
Gates Industrial's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was 52.5 (Mar. 2023 ) + 131.4 (Jun. 2023 ) + 107.8 (Sep. 2023 ) + 189.3 (Dec. 2023 ) = $481 Mil.
Gates Industrial's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -29.9 (Mar. 2023 ) + -11.2 (Jun. 2023 ) + -16.9 (Sep. 2023 ) + -23.8 (Dec. 2023 ) = $-82 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.
Gates Industrial (NYSE:GTES) 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, Gates Industrial has a Sloan Ratio of -2.29%, indicating the company is in the safe zone and there is no funny business with accruals.
Gates Industrial Sloan Ratio % Related Terms
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Gates Industrial (Gates Industrial) Business Description
Gates Industrial Corp PLC is a manufacturer of engineered power transmission and fluid power solutions. The company has two operating segments; Power Transmission and Fluid Power segments. The Power Transmission solutions convey power and control motion. They are used in applications in which belts, chains, cables, geared transmissions, or direct drives transfer power from an engine or motor to another part or system. The Fluid power solutions are used in applications in which hoses and rigid tubing assemblies either transfer power hydraulically or convey fluids, gases, or granular materials from one location to another. The company generates key revenue from the Power Transmission segment.
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