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.
* 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 Tianqi Lithium Industries's Sloan Ratio %
For the Specialty Chemicals subindustry, Tianqi Lithium Industries'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.
Tianqi Lithium Industries's Sloan Ratio % Distribution in the Chemicals Industry
For the Chemicals industry and Basic Materials sector, Tianqi Lithium Industries's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Tianqi Lithium Industries's Sloan Ratio % falls into.
Tianqi Lithium Industries 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.
Tianqi Lithium Industries's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Tianqi Lithium Industries's Net Income for the trailing twelve months (TTM) ended in Mar. 2024 was 1577.236 (Jun. 2023 ) + 1646.051 (Sep. 2023 ) + -801.199 (Dec. 2023 ) + -3896.785 (Mar. 2024 ) = ¥-1,475 Mil.
Tianqi Lithium Industries's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2024 was 7165.296 (Jun. 2023 ) + 7933.81 (Sep. 2023 ) + 2652.857 (Dec. 2023 ) + 3144.368 (Mar. 2024 ) = ¥20,896 Mil.
Tianqi Lithium Industries's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2024 was 578.795 (Jun. 2023 ) + -771.428 (Sep. 2023 ) + -1121.183 (Dec. 2023 ) + -2093.395 (Mar. 2024 ) = ¥-3,407 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.
Tianqi Lithium Industries (SZSE:002466) 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, Tianqi Lithium Industries has a Sloan Ratio of -27.11%, indicating there is a warning stage of accrual build up.
Tianqi Lithium Industries Sloan Ratio % Related Terms
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Tianqi Lithium Industries (SZSE:002466) Business Description
Tianqi Lithium is a leading new energy materials company headquartered in China. The company is the largest producer of mined lithium globally in terms of output and is ranked third in terms of revenue generated from lithium, according to Wood Mackenzie. It is also the world's fourth largest and Asia's second largest lithium compound producer, as measured by production output, according to the same source. Tianqi is the only lithium producer in China that has achieved 100% self-sufficiency and has fully vertically integrated lithium mines. It operates in critical stages of the lithium value chain, including: 1) mining of lithium ore and manufacturing of lithium concentrate; and 2) manufacturing of lithium compounds and derivatives.
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