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.
Align Technology's Sloan Ratio for the quarter that ended in Mar. 2024 was 1.14%.
As of Mar. 2024, Align Technology has a Sloan Ratio of 1.14%, indicating the company is in the safe zone and there is no funny business with accruals.
Align Technology Sloan Ratio % Historical Data
The historical data trend for Align Technology'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 Align Technology's Sloan Ratio %
For the Medical Devices subindustry, Align Technology'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.
Align Technology's Sloan Ratio % Distribution in the Medical Devices & Instruments Industry
For the Medical Devices & Instruments industry and Healthcare sector, Align Technology's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Align Technology's Sloan Ratio % falls into.
Align Technology 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.
Align Technology's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Align Technology's Net Income for the trailing twelve months (TTM) ended in Mar. 2024 was 111.814 (Jun. 2023 ) + 121.427 (Sep. 2023 ) + 124.014 (Dec. 2023 ) + 105.028 (Mar. 2024 ) = $462 Mil.
Align Technology's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2024 was 251.777 (Jun. 2023 ) + 287.206 (Sep. 2023 ) + 46.898 (Dec. 2023 ) + 28.664 (Mar. 2024 ) = $615 Mil.
Align Technology's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2024 was -125.485 (Jun. 2023 ) + -4.305 (Sep. 2023 ) + -13.324 (Dec. 2023 ) + -79.584 (Mar. 2024 ) = $-223 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.
Align Technology (NAS:ALGN) 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, Align Technology has a Sloan Ratio of 1.14%, indicating the company is in the safe zone and there is no funny business with accruals.
Align Technology Sloan Ratio % Related Terms
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Align Technology (Align Technology) Business Description
Align Technology is the leading manufacturer of clear aligners. Invisalign, its main product, was approved by the FDA in 1998, and it has since dominated, controlling over 90% of the market. Invisalign can treat roughly 90% of all malocclusion cases (misaligned teeth), and there are over 230,000 Invisalign-trained dentists and orthodontists. In 2022, Invisalign treated over 2 million cases, or roughly 10% of all orthodontic cases for the year, and it has treated over 14 million patients since its launch. Align also sells intraoral scanners under the brand iTero, which captures digital impressions of patients' teeth and illustrates treatment plans. Over 85% of Invisalign cases are submitted by digital scans and iTero scans make up over half of these scans.
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