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.
Ally Financial's Sloan Ratio for the quarter that ended in Mar. 2024 was -0.16%.
As of Mar. 2024, Ally Financial has a Sloan Ratio of -0.16%, indicating the company is in the safe zone and there is no funny business with accruals.
Ally Financial Sloan Ratio % Historical Data
The historical data trend for Ally Financial'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 Ally Financial's Sloan Ratio %
For the Credit Services subindustry, Ally Financial'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.
Ally Financial's Sloan Ratio % Distribution in the Credit Services Industry
For the Credit Services industry and Financial Services sector, Ally Financial's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Ally Financial's Sloan Ratio % falls into.
Ally Financial 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.
Ally Financial's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Ally Financial's Net Income for the trailing twelve months (TTM) ended in Mar. 2024 was 303.667 (Jun. 2023 ) + 277.352 (Sep. 2023 ) + 69.692 (Dec. 2023 ) + 144.44 (Mar. 2024 ) = €795 Mil.
Ally Financial's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2024 was 1465.724 (Jun. 2023 ) + 1555.42 (Sep. 2023 ) + -15.589 (Dec. 2023 ) + 1233.72 (Mar. 2024 ) = €4,239 Mil.
Ally Financial's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2024 was -1936.454 (Jun. 2023 ) + -1625.695 (Sep. 2023 ) + -2817.941 (Dec. 2023 ) + 3220.92 (Mar. 2024 ) = €-3,159 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.
Ally Financial (STU:GMZ) 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, Ally Financial has a Sloan Ratio of -0.16%, indicating the company is in the safe zone and there is no funny business with accruals.
Ally Financial Sloan Ratio % Related Terms
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Formerly the captive financial arm of General Motors, Ally Financial became an independent publicly traded firm in 2014 and is one of the largest consumer auto lenders in the country. While the firm has expanded its product offerings over time, it remains primarily focused on auto lending with more than 70% of its loan book in consumer auto loans and dealer financing. Ally also offers auto insurance, personal loans, commercial loans, credit cards, and holds a portfolio of mortgage debt, giving the bank a diversified business model, which includes brokerage services.
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