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.
Faro Technologies's Sloan Ratio for the quarter that ended in Dec. 2023 was -4.79%.
As of Dec. 2023, Faro Technologies has a Sloan Ratio of -4.79%, indicating the company is in the safe zone and there is no funny business with accruals.
Faro Technologies Sloan Ratio % Historical Data
The historical data trend for Faro Technologies'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 Scientific & Technical Instruments subindustry, Faro Technologies'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.
Faro Technologies Sloan Ratio % Distribution
For the Hardware industry and Technology sector, Faro Technologies's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Faro Technologies's Sloan Ratio % falls into.
Faro Technologies 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.
Faro Technologies's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Faro Technologies's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was -21.164 (Mar. 2023 ) + -28.245 (Jun. 2023 ) + -8.756 (Sep. 2023 ) + 1.588 (Dec. 2023 ) = $-56.6 Mil.
Faro Technologies's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was -18.344 (Mar. 2023 ) + 5.137 (Jun. 2023 ) + -4.373 (Sep. 2023 ) + 18.655 (Dec. 2023 ) = $1.1 Mil.
Faro Technologies's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -23.532 (Mar. 2023 ) + -4.42 (Jun. 2023 ) + 17.865 (Sep. 2023 ) + -23.403 (Dec. 2023 ) = $-33.5 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.
Faro Technologies (NAS:FARO) 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, Faro Technologies has a Sloan Ratio of -4.79%, indicating the company is in the safe zone and there is no funny business with accruals.
Faro Technologies Sloan Ratio % Related Terms
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Faro Technologies (Faro Technologies) Business Description
Faro Technologies Inc is a global technology company. It designs, develops, manufactures, markets and supports software-driven, three-dimensional (3-D) measurement, imaging, and realization solutions for the 3D metrology, architecture, engineering and construction (AEC), Operations and Maintenance (O&M) and public safety analytics markets. The company enables its customers to capture, measure, manipulate, interact with and share 3D and 2D data from the physical world in a virtual environment and then translate the information back into the physical domain. FARO suite of 3D products and software solutions are used for the inspection of components and assemblies, rapid prototyping, reverse engineering, documenting large volumes or structures in 3D, surveying, and construction.
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