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.
AVITA Medical's Sloan Ratio for the quarter that ended in Mar. 2024 was 7.29%.
As of Mar. 2024, AVITA Medical has a Sloan Ratio of 7.29%, indicating the company is in the safe zone and there is no funny business with accruals.
AVITA Medical Sloan Ratio % Historical Data
The historical data trend for AVITA Medical'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 AVITA Medical's Sloan Ratio %
For the Medical Devices subindustry, AVITA Medical'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.
AVITA Medical's Sloan Ratio % Distribution in the Medical Devices & Instruments Industry
For the Medical Devices & Instruments industry and Healthcare sector, AVITA Medical's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where AVITA Medical's Sloan Ratio % falls into.
AVITA Medical 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.
AVITA Medical's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
AVITA Medical's Net Income for the trailing twelve months (TTM) ended in Mar. 2024 was -10.384 (Jun. 2023 ) + -8.712 (Sep. 2023 ) + -7.065 (Dec. 2023 ) + -18.658 (Mar. 2024 ) = $-44.82 Mil.
AVITA Medical's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2024 was -9.101 (Jun. 2023 ) + -8.974 (Sep. 2023 ) + -10.863 (Dec. 2023 ) + -20.864 (Mar. 2024 ) = $-49.80 Mil.
AVITA Medical's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2024 was 18.363 (Jun. 2023 ) + 21.761 (Sep. 2023 ) + -57.304 (Dec. 2023 ) + 15.066 (Mar. 2024 ) = $-2.11 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.
AVITA Medical (NAS:RCEL) 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, AVITA Medical has a Sloan Ratio of 7.29%, indicating the company is in the safe zone and there is no funny business with accruals.
AVITA Medical Sloan Ratio % Related Terms
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AVITA Medical (AVITA Medical) Business Description
Avita is a single product company. Its RECELL system is an innovative burn treatment device which creates Spray-on Skin from a small skin sample within 30 minutes, thus avoiding or reducing the need for skin grafts. It's approved for the treatment of adult patients in the U.S. with paediatric clinical trials and expanded indications in soft-tissue reconstruction and vitiligo underway. It is currently in roll-out across the approximately 136 U.S. burn centers. Despite having product approval in Australia, Europe, Canada, and China, Avita is not actively marketing in those territories and focussing instead on the U.S. region. However, it is expected to launch in Japan via distribution partner Cosmotec in second-half fiscal 2022. Avita is domiciled, and has its primary listing, in the U.S.
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