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.
Employers Holdings's Sloan Ratio for the quarter that ended in Dec. 2023 was -8.69%.
As of Dec. 2023, Employers Holdings has a Sloan Ratio of -8.69%, indicating the company is in the safe zone and there is no funny business with accruals.
Employers Holdings Sloan Ratio % Historical Data
The historical data trend for Employers Holdings'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 Employers Holdings's Sloan Ratio %
For the Insurance - Specialty subindustry, Employers Holdings'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.
Employers Holdings's Sloan Ratio % Distribution in the Insurance Industry
For the Insurance industry and Financial Services sector, Employers Holdings's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Employers Holdings's Sloan Ratio % falls into.
Employers Holdings 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.
Employers Holdings's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Employers Holdings's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was 23.6 (Mar. 2023 ) + 34.9 (Jun. 2023 ) + 14 (Sep. 2023 ) + 45.6 (Dec. 2023 ) = $118.1 Mil.
Employers Holdings's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was 4.3 (Mar. 2023 ) + -7.8 (Jun. 2023 ) + 25.3 (Sep. 2023 ) + 27.6 (Dec. 2023 ) = $49.4 Mil.
Employers Holdings's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was 12.8 (Mar. 2023 ) + 106.6 (Jun. 2023 ) + 105.6 (Sep. 2023 ) + 152.3 (Dec. 2023 ) = $377.3 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.
Employers Holdings (NYSE:EIG) 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, Employers Holdings has a Sloan Ratio of -8.69%, indicating the company is in the safe zone and there is no funny business with accruals.
Employers Holdings Sloan Ratio % Related Terms
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Employers Holdings (Employers Holdings) Business Description
Employers Holdings Inc provides workers' compensation insurance, primarily to small businesses in low- to medium hazard industries. Its customers are employers, and the insurance premiums that those employers pay account for more than 90% of total company revenue. Substantially all of the remaining revenue is generated through investments. The company operates exclusively in the United States, and it generates more than half of its business in California. By industry, the company has the most exposure to restaurants, which account for roughly a fourth of the total premiums the company earns.
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