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.
Lockheed Martin's Sloan Ratio for the quarter that ended in Mar. 2024 was 1.08%.
As of Mar. 2024, Lockheed Martin has a Sloan Ratio of 1.08%, indicating the company is in the safe zone and there is no funny business with accruals.
Lockheed Martin Sloan Ratio % Historical Data
The historical data trend for Lockheed Martin'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 Lockheed Martin's Sloan Ratio %
For the Aerospace & Defense subindustry, Lockheed Martin'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.
Lockheed Martin's Sloan Ratio % Distribution in the Aerospace & Defense Industry
For the Aerospace & Defense industry and Industrials sector, Lockheed Martin's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Lockheed Martin's Sloan Ratio % falls into.
Lockheed Martin 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.
Lockheed Martin's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Lockheed Martin's Net Income for the trailing twelve months (TTM) ended in Mar. 2024 was 1681 (Jun. 2023 ) + 1684 (Sep. 2023 ) + 1866 (Dec. 2023 ) + 1545 (Mar. 2024 ) = $6,776 Mil.
Lockheed Martin's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2024 was 1100 (Jun. 2023 ) + 2891 (Sep. 2023 ) + 2365 (Dec. 2023 ) + 1635 (Mar. 2024 ) = $7,991 Mil.
Lockheed Martin's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2024 was -334 (Jun. 2023 ) + -398 (Sep. 2023 ) + -703 (Dec. 2023 ) + -372 (Mar. 2024 ) = $-1,807 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.
Lockheed Martin (NYSE:LMT) 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, Lockheed Martin has a Sloan Ratio of 1.08%, indicating the company is in the safe zone and there is no funny business with accruals.
Lockheed Martin Sloan Ratio % Related Terms
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Lockheed Martin (Lockheed Martin) Business Description
Lockheed Martin is the world's largest defense contractor and has dominated the Western market for high-end fighter aircraft since it won the F-35 Joint Strike Fighter program in 2001. Lockheed's largest segment is aeronautics, which derives upward of two-thirds of its revenue from the F-35. Lockheed's remaining segments are rotary and mission systems, which is mainly the Sikorsky helicopter business; missiles and fire control, which creates missiles and missile defense systems; and space systems, which produces satellites and receives equity income from the United Launch Alliance joint venture.
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