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.
Leaf Group's Sloan Ratio for the quarter that ended in Mar. 2021 was -7.02%.
As of Mar. 2021, Leaf Group has a Sloan Ratio of -7.02%, indicating the company is in the safe zone and there is no funny business with accruals.
Leaf Group Sloan Ratio % Historical Data
The historical data trend for Leaf Group'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 Leaf Group's Sloan Ratio %
For the Internet Content & Information subindustry, Leaf Group'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.
Leaf Group's Sloan Ratio % Distribution in the Interactive Media Industry
For the Interactive Media industry and Communication Services sector, Leaf Group's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Leaf Group's Sloan Ratio % falls into.
Leaf Group 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.
Leaf Group's Sloan Ratio for the fiscal year that ended in Dec. 2020 is calculated as
Leaf Group's Net Income for the trailing twelve months (TTM) ended in Mar. 2021 was 0.803 (Jun. 2020 ) + 3.686 (Sep. 2020 ) + -2.673 (Dec. 2020 ) + -6.295 (Mar. 2021 ) = $-4.5 Mil.
Leaf Group's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2021 was 7.909 (Jun. 2020 ) + 2.931 (Sep. 2020 ) + 4.394 (Dec. 2020 ) + -12.993 (Mar. 2021 ) = $2.2 Mil.
Leaf Group's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2021 was 2.285 (Jun. 2020 ) + 3.505 (Sep. 2020 ) + -2.106 (Dec. 2020 ) + -1.651 (Mar. 2021 ) = $2.0 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.
Leaf Group (NYSE:LEAF) 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. 2021, Leaf Group has a Sloan Ratio of -7.02%, indicating the company is in the safe zone and there is no funny business with accruals.
Leaf Group Sloan Ratio % Related Terms
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Leaf Group Ltd is a diversified consumer internet company that builds enduring, creator-driven brands that reach passionate audiences in large and growing lifestyle categories, including fitness and wellness and home, art and design. The company operates in three segments: Society6 Group, Saatchi Art Group, and Media Group. Society6 Group is made-to-order marketplace business and includes Society6.com and its wholesale channel. Saatchi Art Group which includes SaatchiArt.com and its complementary art fair event brand, The Other Art Fair which is online art gallery with a focus on emerging artists. Its Media Group segment consists of a diverse portfolio of media properties that educate and inform consumers on a broad range of topics.
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