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.
Molina Healthcare's Sloan Ratio for the quarter that ended in Mar. 2024 was 6.71%.
As of Mar. 2024, Molina Healthcare has a Sloan Ratio of 6.71%, indicating the company is in the safe zone and there is no funny business with accruals.
Molina Healthcare Sloan Ratio % Historical Data
The historical data trend for Molina Healthcare'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 Molina Healthcare's Sloan Ratio %
For the Healthcare Plans subindustry, Molina Healthcare'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.
Molina Healthcare's Sloan Ratio % Distribution in the Healthcare Plans Industry
For the Healthcare Plans industry and Healthcare sector, Molina Healthcare's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Molina Healthcare's Sloan Ratio % falls into.
Molina Healthcare 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.
Molina Healthcare's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Molina Healthcare's Net Income for the trailing twelve months (TTM) ended in Mar. 2024 was 309 (Jun. 2023 ) + 245 (Sep. 2023 ) + 216 (Dec. 2023 ) + 301 (Mar. 2024 ) = $1,071 Mil.
Molina Healthcare's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2024 was 487 (Jun. 2023 ) + 949 (Sep. 2023 ) + -690 (Dec. 2023 ) + 214 (Mar. 2024 ) = $960 Mil.
Molina Healthcare's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2024 was -137 (Jun. 2023 ) + -280 (Sep. 2023 ) + -25 (Dec. 2023 ) + -488 (Mar. 2024 ) = $-930 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.
Molina Healthcare (NYSE:MOH) 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, Molina Healthcare has a Sloan Ratio of 6.71%, indicating the company is in the safe zone and there is no funny business with accruals.
Molina Healthcare Sloan Ratio % Related Terms
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Molina Healthcare (Molina Healthcare) Business Description
Molina Healthcare Inc offers healthcare plans focused on Medicaid-related solutions for low-income families and individuals. Its health plans are operated by a network of subsidiaries, each of which is licensed as a health maintenance organization (HMO). In addition to its Health Plans segment, Molina has a Medicaid,Medicare, and Marketplace segment that represent the government-funded or sponsored programs under their management information systems. Molina's Medicaid plans receive revenue on a per-member per-month basis from state government agencies, and its Medicare Advantage plans receive revenue from managed care plans that contract with the Centers for Medicaid and Medicare (CMS). Molina also provides plans through health insurance exchanges.
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