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.
Digi International's Sloan Ratio for the quarter that ended in Mar. 2024 was -5.43%.
As of Mar. 2024, Digi International has a Sloan Ratio of -5.43%, indicating the company is in the safe zone and there is no funny business with accruals.
Digi International Sloan Ratio % Historical Data
The historical data trend for Digi International'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 Digi International's Sloan Ratio %
For the Communication Equipment subindustry, Digi International'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.
Digi International's Sloan Ratio % Distribution in the Hardware Industry
For the Hardware industry and Technology sector, Digi International's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Digi International's Sloan Ratio % falls into.
Digi International 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.
Digi International's Sloan Ratio for the fiscal year that ended in Sep. 2023 is calculated as
Digi International's Net Income for the trailing twelve months (TTM) ended in Mar. 2024 was 6.209 (Jun. 2023 ) + 5.964 (Sep. 2023 ) + -2.801 (Dec. 2023 ) + 3.674 (Mar. 2024 ) = €13.0 Mil.
Digi International's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2024 was 16.796 (Jun. 2023 ) + 8.383 (Sep. 2023 ) + 17.122 (Dec. 2023 ) + 12.011 (Mar. 2024 ) = €54.3 Mil.
Digi International's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2024 was -0.911 (Jun. 2023 ) + -0.471 (Sep. 2023 ) + -0.268 (Dec. 2023 ) + 1.58 (Mar. 2024 ) = €-0.1 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.
Digi International (STU:DGI) 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, Digi International has a Sloan Ratio of -5.43%, indicating the company is in the safe zone and there is no funny business with accruals.
Digi International Sloan Ratio % Related Terms
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Digi International Inc is a Minnesota corporation. The company provides business and mission-critical and Internet of Things (IoT) connectivity products and services. It has two segments: IoT Products and Services and IoT Solutions. The IoT Products and Services segment consists of distinct communications products and communication product development services. IoT Solutions segment offers wireless temperature and other environmental condition monitoring services as well as employee task management services. The company generates majority of its revenue from the IoT Products & Services segment. Geographically, the company generates majority of its revenue from its business in the United States and also has its presence in Europe, Middle East and Africa and Rest of the world.
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