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.
Avanos Medical's Sloan Ratio for the quarter that ended in Dec. 2023 was -6.84%.
As of Dec. 2023, Avanos Medical has a Sloan Ratio of -6.84%, indicating the company is in the safe zone and there is no funny business with accruals.
Avanos Medical Sloan Ratio % Historical Data
The historical data trend for Avanos Medical'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 Avanos Medical's Sloan Ratio %
For the Medical Devices subindustry, Avanos Medical'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.
Avanos Medical's Sloan Ratio % Distribution in the Medical Devices & Instruments Industry
For the Medical Devices & Instruments industry and Healthcare sector, Avanos Medical's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Avanos Medical's Sloan Ratio % falls into.
Avanos Medical 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.
Avanos Medical's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Avanos Medical's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was -0.5 (Mar. 2023 ) + -68.1 (Jun. 2023 ) + -3.7 (Sep. 2023 ) + 10.5 (Dec. 2023 ) = $-61.8 Mil.
Avanos Medical's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was -6.8 (Mar. 2023 ) + -2.6 (Jun. 2023 ) + 29.1 (Sep. 2023 ) + 12.7 (Dec. 2023 ) = $32.4 Mil.
Avanos Medical's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -4 (Mar. 2023 ) + -6.5 (Jun. 2023 ) + -48.9 (Sep. 2023 ) + 81 (Dec. 2023 ) = $21.6 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.
Avanos Medical (NYSE:AVNS) 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, Avanos Medical has a Sloan Ratio of -6.84%, indicating the company is in the safe zone and there is no funny business with accruals.
Avanos Medical Sloan Ratio % Related Terms
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Avanos Medical (Avanos Medical) Business Description
Avanos Medical Inc is a United States-based company that develops and sells medical devices and related services globally. The firm operates in one segment, medical devices, which primarily sells products related to pain management, IV Therapy, and respiratory and digestive health. The company divides its Medical Devices segment into two franchises: Pain Management and Chronic Care. Pain Management provides non-opioid products for acute and interventional pain, including cold and compression therapy. Chronic Care aims at addressing digestive and respiratory issues with feeding tubes and catheters. Avanos generates most of its revenue from its Chronic Care franchise and in North America.
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