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.
As of Dec. 2023, Goodyear Tire & Rubber Co has a Sloan Ratio of -3.18%, indicating the company is in the safe zone and there is no funny business with accruals.
Goodyear Tire & Rubber Co Sloan Ratio % Historical Data
* 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 Goodyear Tire & Rubber Co's Sloan Ratio %
For the Auto Parts subindustry, Goodyear Tire & Rubber Co'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.
Goodyear Tire & Rubber Co's Sloan Ratio % Distribution in the Vehicles & Parts Industry
For the Vehicles & Parts industry and Consumer Cyclical sector, Goodyear Tire & Rubber Co's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Goodyear Tire & Rubber Co's Sloan Ratio % falls into.
Goodyear Tire & Rubber Co 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.
Goodyear Tire & Rubber Co's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Goodyear Tire & Rubber Co's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was -101 (Mar. 2023 ) + -208 (Jun. 2023 ) + -89 (Sep. 2023 ) + -291 (Dec. 2023 ) = $-689 Mil.
Goodyear Tire & Rubber Co's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was -775 (Mar. 2023 ) + 341 (Jun. 2023 ) + 230 (Sep. 2023 ) + 1236 (Dec. 2023 ) = $1,032 Mil.
Goodyear Tire & Rubber Co's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -456 (Mar. 2023 ) + -189 (Jun. 2023 ) + -173 (Sep. 2023 ) + -217 (Dec. 2023 ) = $-1,035 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.
Goodyear Tire & Rubber Co (NAS:GT) 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, Goodyear Tire & Rubber Co has a Sloan Ratio of -3.18%, indicating the company is in the safe zone and there is no funny business with accruals.
Goodyear Tire & Rubber Co Sloan Ratio % Related Terms
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Goodyear Tire & Rubber Co (Goodyear Tire & Rubber Co) Business Description
Goodyear Tire & Rubber Co manufactures and sells a variety of rubber tires under the Goodyear brand name. The firm's tires are used for automobiles, trucks, buses, aircraft, motorcycles, mining equipment, farm equipment, and industrial equipment. The company operates its business through three operating segments representing its regional tire businesses: Americas; Europe, the Middle East, and Africa (EMEA); and the Asia Pacific.
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