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.
* 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 Dr Reddy's Laboratories's Sloan Ratio %
For the Drug Manufacturers - Specialty & Generic subindustry, Dr Reddy's Laboratories'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.
Dr Reddy's Laboratories's Sloan Ratio % Distribution in the Drug Manufacturers Industry
For the Drug Manufacturers industry and Healthcare sector, Dr Reddy's Laboratories's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Dr Reddy's Laboratories's Sloan Ratio % falls into.
Dr Reddy's Laboratories 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.
Dr Reddy's Laboratories's Sloan Ratio for the fiscal year that ended in Mar. 2023 is calculated as
Dr Reddy's Laboratories's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was 116.597 (Mar. 2023 ) + 170.568 (Jun. 2023 ) + 178.163 (Sep. 2023 ) + 165.626 (Dec. 2023 ) = $631 Mil.
Dr Reddy's Laboratories's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was 239.21 (Mar. 2023 ) + 136.819 (Jun. 2023 ) + 215.794 (Sep. 2023 ) + 56.898 (Dec. 2023 ) = $649 Mil.
Dr Reddy's Laboratories's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -191.731 (Mar. 2023 ) + -100.164 (Jun. 2023 ) + -54.376 (Sep. 2023 ) + -194.345 (Dec. 2023 ) = $-541 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.
Dr Reddy's Laboratories (NYSE:RDY) 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, Dr Reddy's Laboratories has a Sloan Ratio of 11.67%, indicating there is a warning stage of accrual build up.
Dr Reddy's Laboratories Sloan Ratio % Related Terms
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Dr Reddy's Laboratories (Dr Reddy's Laboratories) Business Description
Dr. Reddy's is one of the largest generic drug manufacturers in the world. It has a significant presence in North America, a region that makes up roughly half of its generics sales, and it services India (22% of its generics sales), Russia (12%), and certain European and Latin American countries. Beyond simple generics, Dr. Reddy's also has a solid portfolio of injectables which make up 25% of its North America sales. In branded generic markets like India, Dr. Reddy's has established a compelling presence with its strong brand name and earned a top five spot in key therapeutic areas including oncology and gastroenterology. Dr. Reddy's also has an active pharmaceutical ingredient business that manufactures over 150 APIs and sells in over 75 countries.
Dr Reddy's Laboratories (Dr Reddy's Laboratories) Headlines
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