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.
The Cigna Group's Sloan Ratio for the quarter that ended in Dec. 2023 was -0.97%.
As of Dec. 2023, The Cigna Group has a Sloan Ratio of -0.97%, indicating the company is in the safe zone and there is no funny business with accruals.
The Cigna Group Sloan Ratio % Historical Data
The historical data trend for The Cigna Group'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 Healthcare Plans subindustry, The Cigna Group'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.
The Cigna Group Sloan Ratio % Distribution
For the Healthcare Plans industry and Healthcare sector, The Cigna Group's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where The Cigna Group's Sloan Ratio % falls into.
The Cigna Group 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.
The Cigna Group's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
The Cigna Group's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was 1267 (Mar. 2023 ) + 1460 (Jun. 2023 ) + 1408 (Sep. 2023 ) + 1029 (Dec. 2023 ) = $5,164 Mil.
The Cigna Group's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was 5028 (Mar. 2023 ) + 2492 (Jun. 2023 ) + 2826 (Sep. 2023 ) + 1467 (Dec. 2023 ) = $11,813 Mil.
The Cigna Group's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -2983 (Mar. 2023 ) + -414 (Jun. 2023 ) + -1337 (Sep. 2023 ) + -440 (Dec. 2023 ) = $-5,174 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.
The Cigna Group (NYSE:CI) 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, The Cigna Group has a Sloan Ratio of -0.97%, indicating the company is in the safe zone and there is no funny business with accruals.
The Cigna Group Sloan Ratio % Related Terms
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The Cigna Group (The Cigna Group) Business Description
Cigna primarily provides pharmacy benefit management and health insurance services. Its PBM services, which were greatly expanded by its 2018 merger with Express Scripts, are mostly sold to health insurance plans and employers. Its largest PBM contract is the Department of Defense and it recently won a deal with top-tier insurer Centene. In health insurance and other benefits, Cigna mostly serves employers through self-funding arrangements, but it also operates in government programs, such as Medicare Advantage. The company operates mostly in the U.S. with 18 million U.S. medical members covered as of the end of June 2023.
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