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.
As of Sep. 2015, TeleCommunication Systems has a Sloan Ratio of 2.32%, indicating the company is in the safe zone and there is no funny business with accruals.
TeleCommunication Systems Sloan Ratio % Historical Data
* 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 TeleCommunication Systems's Sloan Ratio %
For the Software - Application subindustry, TeleCommunication Systems'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.
TeleCommunication Systems's Sloan Ratio % Distribution in the Software Industry
For the Software industry and Technology sector, TeleCommunication Systems's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where TeleCommunication Systems's Sloan Ratio % falls into.
TeleCommunication Systems 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.
TeleCommunication Systems's Sloan Ratio for the fiscal year that ended in Dec. 2014 is calculated as
TeleCommunication Systems's Net Income for the trailing twelve months (TTM) ended in Sep. 2015 was -0.348 (Dec. 2014 ) + 0.295 (Mar. 2015 ) + 0.717 (Jun. 2015 ) + 3.024 (Sep. 2015 ) = $3.7 Mil.
TeleCommunication Systems's Cash Flow from Operations for the trailing twelve months (TTM) ended in Sep. 2015 was -5.892 (Dec. 2014 ) + 8.452 (Mar. 2015 ) + -4.368 (Jun. 2015 ) + 2.851 (Sep. 2015 ) = $1.0 Mil.
TeleCommunication Systems's Cash Flow from Investing for the trailing twelve months (TTM) ended in Sep. 2015 was 4.816 (Dec. 2014 ) + -0.128 (Mar. 2015 ) + -0.308 (Jun. 2015 ) + -9.835 (Sep. 2015 ) = $-5.5 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.
TeleCommunication Systems (NAS:TSYS) 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 Sep. 2015, TeleCommunication Systems has a Sloan Ratio of 2.32%, indicating the company is in the safe zone and there is no funny business with accruals.
TeleCommunication Systems Sloan Ratio % Related Terms
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TeleCommunication Systems (TeleCommunication Systems) Business Description
TeleCommunication Systems Inc is a Maryland corporation, founded in 1987. The Company develops and delivers wireless communication technology, the development of which has led to ownership of 349 patents and nearly 400 patent applications. It delivers cellular network computing services that include public safety solutions for 9-1-1 call delivery, precision location platforms, and applications that include navigation, locator applications and text messaging, as well as secure wireless communications systems and professional services, including cybersecurity training and technology for defense and other government customers. Customers use its "mobile cloud" software functionality through connections to and from network operations centers, paying the Company monthly fees based on the number of subscribers, cell sites, call center circuits, or other metrics. The Company does business with the U.S. federal government as a prime contractor under major technology contract vehicles, as well as state, local and foreign government entities. The Company's segments include Government, and Commercial. Through the Government Segment, it provides professional services including field support of deployable wireless systems and cybersecurity training to the U.S. Department of Defense and other government and foreign customers. It owns and operates secure satellite teleport facilities, resell access to satellite airtime (known as space segment), and design, furnish, install and operate wireless communication systems and components, including its SwiftLink deployable communication systems which integrate high speed, satellite and internet protocol technology with secure, federal government-approved cryptologic devices. Through the Commercial segment, it enables 9-1-1 call routing via cellular, Voice over Internet Protocol (VoIP) and next generation technology. Other hosted and managed services include cellular carrier infrastructure for text messaging and location-based platforms and applications, including turn-by-turn navigation. Commercial segment customers include wireless carrier network operators, Voice over Internet Protocol service providers, wireless device manufacturers, automotive industry suppliers, and state and local governments. SwiftLink, Xypoint, AtlasBook, Gokivo, Connections that Matter, Designed for Mobility, Secure the Edge, Art of Exploitation, and Enabling Convergent Technologies are registered trademarks or service marks of the Company. The Company sells products and services through direct sales force and through indirect channels. The Company is subject to procurement and other related laws and regulations which carry significant penalties for non-compliance.
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