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.
Deere's Sloan Ratio for the quarter that ended in Jan. 2024 was 9.20%.
As of Jan. 2024, Deere has a Sloan Ratio of 9.20%, indicating the company is in the safe zone and there is no funny business with accruals.
Deere Sloan Ratio % Historical Data
The historical data trend for Deere'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.
For the Farm & Heavy Construction Machinery subindustry, Deere'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.
Deere's Sloan Ratio % Distribution in the Farm & Heavy Construction Machinery Industry
For the Farm & Heavy Construction Machinery industry and Industrials sector, Deere's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Deere's Sloan Ratio % falls into.
Deere 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.
Deere's Sloan Ratio for the fiscal year that ended in Oct. 2023 is calculated as
Deere's Net Income for the trailing twelve months (TTM) ended in Jan. 2024 was 2860 (Apr. 2023 ) + 2978 (Jul. 2023 ) + 2369 (Oct. 2023 ) + 1751 (Jan. 2024 ) = $9,958 Mil.
Deere's Cash Flow from Operations for the trailing twelve months (TTM) ended in Jan. 2024 was 1099 (Apr. 2023 ) + 3043 (Jul. 2023 ) + 5693 (Oct. 2023 ) + -908 (Jan. 2024 ) = $8,927 Mil.
Deere's Cash Flow from Investing for the trailing twelve months (TTM) ended in Jan. 2024 was -2254 (Apr. 2023 ) + -3069 (Jul. 2023 ) + -4186 (Oct. 2023 ) + 1217 (Jan. 2024 ) = $-8,292 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.
Deere (NYSE:DE) 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 Jan. 2024, Deere has a Sloan Ratio of 9.20%, indicating the company is in the safe zone and there is no funny business with accruals.
Deere Sloan Ratio % Related Terms
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Deere is the world's leading manufacturer of agricultural equipment, producing some of the most recognizable machines in the heavy machinery industry. The company is divided into four reportable segments: production and precision agriculture, small agriculture and turf, construction and forestry, and John Deere Capital. Its products are available through an extensive dealer network, which includes over 2,000 dealer locations in North America and approximately 3,700 locations globally. John Deere Capital provides retail financing for machinery to its customers, in addition to wholesale financing for dealers, which increases the likelihood of Deere product sales.
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