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.
Xtera Communications's Sloan Ratio for the quarter that ended in Jun. 2016 was -29.11%.
As of Jun. 2016, Xtera Communications has a Sloan Ratio of -29.11%, indicating there is a warning stage of accrual build up.
Xtera Communications Sloan Ratio % Historical Data
The historical data trend for Xtera Communications'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 Xtera Communications's Sloan Ratio %
For the Communication Equipment subindustry, Xtera Communications'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.
Xtera Communications's Sloan Ratio % Distribution in the Hardware Industry
For the Hardware industry and Technology sector, Xtera Communications's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Xtera Communications's Sloan Ratio % falls into.
Xtera Communications 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.
Xtera Communications's Sloan Ratio for the fiscal year that ended in Sep. 2015 is calculated as
Xtera Communications's Net Income for the trailing twelve months (TTM) ended in Jun. 2016 was -6.556 (Sep. 2015 ) + -7.214 (Dec. 2015 ) + -6.601 (Mar. 2016 ) + -23.637 (Jun. 2016 ) = $-44.01 Mil.
Xtera Communications's Cash Flow from Operations for the trailing twelve months (TTM) ended in Jun. 2016 was -5.677 (Sep. 2015 ) + -12.78 (Dec. 2015 ) + -7.369 (Mar. 2016 ) + 0.041 (Jun. 2016 ) = $-25.79 Mil.
Xtera Communications's Cash Flow from Investing for the trailing twelve months (TTM) ended in Jun. 2016 was -0.295 (Sep. 2015 ) + -2.856 (Dec. 2015 ) + -0.585 (Mar. 2016 ) + -0.087 (Jun. 2016 ) = $-3.82 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.
Xtera Communications (OTCPK:XCOMQ) 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 Jun. 2016, Xtera Communications has a Sloan Ratio of -29.11%, indicating there is a warning stage of accrual build up.
Xtera Communications Sloan Ratio % Related Terms
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Xtera Communications (Xtera Communications) Business Description
Xtera Communications Inc is a provider of optical transport solutions. It sells its optical transport solutions to telecommunications service providers, content service providers, enterprises and government entities across the world to support their deployments of long-haul terrestrial and submarine optical cable networks. Its optical networking solutions are designed to offer reach and capacity for intermediate sites between end-points of long-haul networks. Its primary service offerings include services, installation and deployment services, on-site hardware replacement services, system maintenance services, extended hardware warranty services and training across a spectrum of products within the optical networking industry. The company offers hardware, software and turnkey solutions.
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