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.
Cardinal Health's Sloan Ratio for the quarter that ended in Dec. 2023 was -6.12%.
As of Dec. 2023, Cardinal Health has a Sloan Ratio of -6.12%, indicating the company is in the safe zone and there is no funny business with accruals.
Cardinal Health Sloan Ratio % Historical Data
The historical data trend for Cardinal Health'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.
For the Medical Distribution subindustry, Cardinal Health'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.
Cardinal Health Sloan Ratio % Distribution
For the Medical Distribution industry and Healthcare sector, Cardinal Health's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Cardinal Health's Sloan Ratio % falls into.
Cardinal Health 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.
Cardinal Health's Sloan Ratio for the fiscal year that ended in Jun. 2023 is calculated as
Cardinal Health's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was 345 (Mar. 2023 ) + -64 (Jun. 2023 ) + 5 (Sep. 2023 ) + 353 (Dec. 2023 ) = $639 Mil.
Cardinal Health's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was 1361 (Mar. 2023 ) + 858 (Jun. 2023 ) + 545 (Sep. 2023 ) + 1189 (Dec. 2023 ) = $3,953 Mil.
Cardinal Health's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -91 (Mar. 2023 ) + -206 (Jun. 2023 ) + -63 (Sep. 2023 ) + -105 (Dec. 2023 ) = $-465 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.
Cardinal Health (NYSE:CAH) 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 Dec. 2023, Cardinal Health has a Sloan Ratio of -6.12%, indicating the company is in the safe zone and there is no funny business with accruals.
Cardinal Health Sloan Ratio % Related Terms
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Cardinal Health (Cardinal Health) Business Description
Cardinal Health is one of three leading pharmaceutical wholesalers in the U.S., engaged in sourcing and distributing of branded, generic, and specialty pharmaceutical products to pharmacies (retail chains, independent, and mail order), hospitals networks, and healthcare providers. Along with Cencora and McKesson, the three comprise well over 90% of the U.S. pharmaceutical wholesale industry. Cardinal Health also supplies medical-surgical products and equipment to healthcare facilities in North America, Europe, and Asia.
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