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.
PacWest Bancorp's Sloan Ratio for the quarter that ended in Sep. 2023 was -22.36%.
As of Sep. 2023, PacWest Bancorp has a Sloan Ratio of -22.36%, indicating there is a warning stage of accrual build up.
PacWest Bancorp Sloan Ratio % Historical Data
The historical data trend for PacWest Bancorp'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 PacWest Bancorp's Sloan Ratio %
For the Banks - Regional subindustry, PacWest Bancorp'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.
PacWest Bancorp's Sloan Ratio % Distribution in the Banks Industry
For the Banks industry and Financial Services sector, PacWest Bancorp's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where PacWest Bancorp's Sloan Ratio % falls into.
PacWest Bancorp 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.
PacWest Bancorp's Sloan Ratio for the fiscal year that ended in Dec. 2022 is calculated as
PacWest Bancorp's Net Income for the trailing twelve months (TTM) ended in Sep. 2023 was 49.509 (Dec. 2022 ) + -1195.424 (Mar. 2023 ) + -197.414 (Jun. 2023 ) + -23.344 (Sep. 2023 ) = $-1,366.7 Mil.
PacWest Bancorp's Cash Flow from Operations for the trailing twelve months (TTM) ended in Sep. 2023 was 202.877 (Dec. 2022 ) + -20.991 (Mar. 2023 ) + 104.951 (Jun. 2023 ) + 32.659 (Sep. 2023 ) = $319.5 Mil.
PacWest Bancorp's Cash Flow from Investing for the trailing twelve months (TTM) ended in Sep. 2023 was -22.032 (Dec. 2022 ) + 133.454 (Mar. 2023 ) + 5736.386 (Jun. 2023 ) + 713.4 (Sep. 2023 ) = $6,561.2 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.
PacWest Bancorp (NAS:PACW) 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 Sep. 2023, PacWest Bancorp has a Sloan Ratio of -22.36%, indicating there is a warning stage of accrual build up.
PacWest Bancorp Sloan Ratio % Related Terms
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PacWest Bancorp (PacWest Bancorp) Business Description
PacWest Bancorp is a bank holding company with one wholly-owned banking subsidiary, Pacific Western Bank. The bank has tens of full-service branches mostly located throughout California. The bank provides commercial banking services, including real estate, construction, and commercial loans, as well as comprehensive deposit and treasury management services, to small and midsize businesses. The Bank also provides venture banking products including a comprehensive suite of financial services focused on entrepreneurial and venture-backed businesses. The vast majority of the bank's net revenue comes from net interest income.
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