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.
DXP Enterprises's Sloan Ratio for the quarter that ended in Dec. 2023 was -1.25%.
As of Dec. 2023, DXP Enterprises has a Sloan Ratio of -1.25%, indicating the company is in the safe zone and there is no funny business with accruals.
DXP Enterprises Sloan Ratio % Historical Data
The historical data trend for DXP Enterprises'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 DXP Enterprises's Sloan Ratio %
For the Industrial Distribution subindustry, DXP Enterprises'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.
DXP Enterprises's Sloan Ratio % Distribution in the Industrial Distribution Industry
For the Industrial Distribution industry and Industrials sector, DXP Enterprises's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where DXP Enterprises's Sloan Ratio % falls into.
DXP Enterprises 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.
DXP Enterprises's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
DXP Enterprises's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was 17.58 (Mar. 2023 ) + 19.054 (Jun. 2023 ) + 16.172 (Sep. 2023 ) + 16.006 (Dec. 2023 ) = $69 Mil.
DXP Enterprises's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was 26.449 (Mar. 2023 ) + -2.432 (Jun. 2023 ) + 39.758 (Sep. 2023 ) + 42.447 (Dec. 2023 ) = $106 Mil.
DXP Enterprises's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -3.804 (Mar. 2023 ) + -10.301 (Jun. 2023 ) + -1.846 (Sep. 2023 ) + -6.696 (Dec. 2023 ) = $-23 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.
DXP Enterprises (NAS:DXPE) 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 Dec. 2023, DXP Enterprises has a Sloan Ratio of -1.25%, indicating the company is in the safe zone and there is no funny business with accruals.
DXP Enterprises Sloan Ratio % Related Terms
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DXP Enterprises (DXP Enterprises) Business Description
DXP Enterprises Inc is a distributor of products and services to industrial customers in the United States, Canada, Mexico, and Dubai. The company's reportable segments include Service Centers, Innovative Pumping Solutions and Supply Chain Services. It generates maximum revenue from the Service Centers segment. The company offers pumping solutions, supply chain services and maintenance, repair, operating and production services for rotating equipment, bearings and power transmissions, industrial supplies and safety products. DXP Enterprises serves the oil and gas, general manufacturing, chemical, reseller, transportation, fabrication and construction, food and beverage, aerospace mining, agriculture, power, and refining industries.
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