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.
Pennon Group's Sloan Ratio for the quarter that ended in Sep. 2023 was 4.87%.
As of Sep. 2023, Pennon Group has a Sloan Ratio of 4.87%, indicating the company is in the safe zone and there is no funny business with accruals.
Pennon Group Sloan Ratio % Historical Data
The historical data trend for Pennon Group'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 Pennon Group's Sloan Ratio %
For the Utilities - Regulated Water subindustry, Pennon Group'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.
Pennon Group's Sloan Ratio % Distribution in the Utilities - Regulated Industry
For the Utilities - Regulated industry and Utilities sector, Pennon Group's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Pennon Group's Sloan Ratio % falls into.
Pennon Group 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.
Pennon Group's Sloan Ratio for the fiscal year that ended in Mar. 2023 is calculated as
For company reported semi-annually, GuruFocus uses latest two semi-annual data as the TTM data.
Pennon Group's Net Income for the trailing twelve months (TTM) ended in Sep. 2023 was -22.087 (Mar. 2023 ) + 1.733 (Sep. 2023 ) = $-20 Mil.
Pennon Group's Cash Flow from Operations for the trailing twelve months (TTM) ended in Sep. 2023 was 111.893 (Mar. 2023 ) + 48.886 (Sep. 2023 ) = $161 Mil.
Pennon Group's Cash Flow from Investing for the trailing twelve months (TTM) ended in Sep. 2023 was -173.301 (Mar. 2023 ) + -329.827 (Sep. 2023 ) = $-503 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.
Pennon Group (OTCPK:PEGRY) 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 Sep. 2023, Pennon Group has a Sloan Ratio of 4.87%, indicating the company is in the safe zone and there is no funny business with accruals.
Pennon Group Sloan Ratio % Related Terms
Thank you for viewing the detailed overview of Pennon Group's Sloan Ratio % provided by GuruFocus.com. Please click on the following links to see related term pages.
Pennon Group PLC is a British water and environmental utility infrastructure company that operates mainly in the United Kingdom. It has smaller operations in the European Union, China, and other countries. The company operates through Water, Non-household retail and other segments. The water business comprises the regulated water and wastewater services undertaken by South West Water. The non-household retail business comprises the services provided by Pennon Water Services in the non-household water and wastewater retail market. Majority of revenue is derived from the water division.
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