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.
Taylor Morrison Home's Sloan Ratio for the quarter that ended in Dec. 2023 was 0.69%.
As of Dec. 2023, Taylor Morrison Home has a Sloan Ratio of 0.69%, indicating the company is in the safe zone and there is no funny business with accruals.
Taylor Morrison Home Sloan Ratio % Historical Data
The historical data trend for Taylor Morrison Home'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 Taylor Morrison Home's Sloan Ratio %
For the Residential Construction subindustry, Taylor Morrison Home'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.
Taylor Morrison Home's Sloan Ratio % Distribution in the Homebuilding & Construction Industry
For the Homebuilding & Construction industry and Consumer Cyclical sector, Taylor Morrison Home's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Taylor Morrison Home's Sloan Ratio % falls into.
Taylor Morrison Home 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.
Taylor Morrison Home's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Taylor Morrison Home's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was 191.051 (Mar. 2023 ) + 234.602 (Jun. 2023 ) + 170.691 (Sep. 2023 ) + 172.585 (Dec. 2023 ) = $769 Mil.
Taylor Morrison Home's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was 347.449 (Mar. 2023 ) + 259.662 (Jun. 2023 ) + -56.55 (Sep. 2023 ) + 255.608 (Dec. 2023 ) = $806 Mil.
Taylor Morrison Home's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -24.58 (Mar. 2023 ) + -20.249 (Jun. 2023 ) + -49.275 (Sep. 2023 ) + -3.087 (Dec. 2023 ) = $-97 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.
Taylor Morrison Home (NYSE:TMHC) 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, Taylor Morrison Home has a Sloan Ratio of 0.69%, indicating the company is in the safe zone and there is no funny business with accruals.
Taylor Morrison Home Sloan Ratio % Related Terms
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Taylor Morrison Home (Taylor Morrison Home) Business Description
Taylor Morrison Home is an American residential construction company that builds single-family homes and communities throughout California, Arizona, Texas, Illinois, Colorado, Florida, Georgia, and North Carolina. Taylor Morrison also reports via a mortgage operations segment that provides financing services for its homebuyers. It constructs various types of single-family homes, from entry-level to luxury move-up homes, as well as active adult communities. The majority of the company's revenue is derived from its construction projects, with the West and central operating regions leading the way.
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