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.
Nova Lifestyle's Sloan Ratio for the quarter that ended in Mar. 2024 was 0.00%.
Warning Sign:
When sloan ratio (-98.78)% higher than 25% or lower than -25%, earnings are more likely to be made up of accruals.
As of Mar. 2024, Nova Lifestyle has a Sloan Ratio of 0.00%, indicating the company is in the safe zone and there is no funny business with accruals.
Nova Lifestyle Sloan Ratio % Historical Data
The historical data trend for Nova Lifestyle'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 Nova Lifestyle's Sloan Ratio %
For the Furnishings, Fixtures & Appliances subindustry, Nova Lifestyle'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.
Nova Lifestyle's Sloan Ratio % Distribution in the Furnishings, Fixtures & Appliances Industry
For the Furnishings, Fixtures & Appliances industry and Consumer Cyclical sector, Nova Lifestyle's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Nova Lifestyle's Sloan Ratio % falls into.
Nova Lifestyle 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.
Nova Lifestyle's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Nova Lifestyle's Net Income for the trailing twelve months (TTM) ended in Mar. 2024 was -0.539 (Jun. 2023 ) + -1.289 (Sep. 2023 ) + -4.674 (Dec. 2023 ) + -1.463 (Mar. 2024 ) = $-7.97 Mil.
Nova Lifestyle's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2024 was 2.162 (Jun. 2023 ) + 0.091 (Sep. 2023 ) + -3.1 (Dec. 2023 ) + -0.222 (Mar. 2024 ) = $-1.07 Mil.
Nova Lifestyle's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2024 was -2.469 (Jun. 2023 ) + 0.031 (Sep. 2023 ) + 2.456 (Dec. 2023 ) + 0 (Mar. 2024 ) = $0.02 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.
Nova Lifestyle (NAS:NVFY) 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, Nova Lifestyle has a Sloan Ratio of 0.00%, indicating the company is in the safe zone and there is no funny business with accruals.
Nova Lifestyle Sloan Ratio % Related Terms
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Nova Lifestyle (Nova Lifestyle) Business Description
Nova Lifestyle Inc is a designer and lifestyle furniture company. It distributes and retails contemporary styled residential and commercial furniture. The firms marketing and sales platform offers retail as well as online selection and purchase fulfillment internationally. The company also sells managed a variety of bedding foundation components. Its collection of lifestyle furniture brands includes Diamond Sofa. The firm's products are made in the United States and Asia. Its customers mainly comprise distributors and retailers having specific geographic coverages that deploy middle to high-end private label home furnishings. The Company operates in one business and industry segment: the design and sale of furniture.
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