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.
Medibank Private's Sloan Ratio for the quarter that ended in Dec. 2023 was 2.39%.
As of Dec. 2023, Medibank Private has a Sloan Ratio of 2.39%, indicating the company is in the safe zone and there is no funny business with accruals.
Medibank Private Sloan Ratio % Historical Data
The historical data trend for Medibank Private'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.
Competitive Comparison of Medibank Private's Sloan Ratio %
For the Insurance - Specialty subindustry, Medibank Private'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.
Medibank Private's Sloan Ratio % Distribution in the Insurance Industry
For the Insurance industry and Financial Services sector, Medibank Private's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Medibank Private's Sloan Ratio % falls into.
Medibank Private 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.
Medibank Private's Sloan Ratio for the fiscal year that ended in Jun. 2023 is calculated as
For company reported semi-annually, GuruFocus uses latest two semi-annual data as the TTM data.
Medibank Private's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was 277.8 (Jun. 2023 ) + 343.2 (Dec. 2023 ) = A$621 Mil.
Medibank Private's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was 309 (Jun. 2023 ) + 64.4 (Dec. 2023 ) = A$373 Mil.
Medibank Private's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -101.5 (Jun. 2023 ) + 256.1 (Dec. 2023 ) = A$155 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.
Medibank Private (ASX:MPL) 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, Medibank Private has a Sloan Ratio of 2.39%, indicating the company is in the safe zone and there is no funny business with accruals.
Medibank Private Sloan Ratio % Related Terms
Thank you for viewing the detailed overview of Medibank Private's Sloan Ratio % provided by GuruFocus.com. Please click on the following links to see related term pages.
Previously owned by the Australian government, Medibank is the largest health insurer in Australia. Its two brands, Medibank Private and ahm, cover around 5 million people. Medibank and Australia's fourth-largest health fund NIB Holdings are the only listed health insurers. In addition to private health insurance, the firm provides life, pet, and travel insurance, as well as health insurance for overseas students and temporary overseas workers. The Medibank Health division provides healthcare services to businesses, governments, and communities across Australia and New Zealand.
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