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.
Compuware's Sloan Ratio for the quarter that ended in Sep. 2014 was -7.82%.
As of Sep. 2014, Compuware has a Sloan Ratio of -7.82%, indicating the company is in the safe zone and there is no funny business with accruals.
Compuware Sloan Ratio % Historical Data
The historical data trend for Compuware'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 Compuware's Sloan Ratio %
For the Software - Application subindustry, Compuware'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.
Compuware's Sloan Ratio % Distribution in the Software Industry
For the Software industry and Technology sector, Compuware's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Compuware's Sloan Ratio % falls into.
Compuware 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.
Compuware's Sloan Ratio for the fiscal year that ended in Mar. 2014 is calculated as
Compuware's Net Income for the trailing twelve months (TTM) ended in Sep. 2014 was 18.266 (Dec. 2013 ) + 14.644 (Mar. 2014 ) + 0.038 (Jun. 2014 ) + 7.101 (Sep. 2014 ) = €40.0 Mil.
Compuware's Cash Flow from Operations for the trailing twelve months (TTM) ended in Sep. 2014 was 23.477 (Dec. 2013 ) + 73.95 (Mar. 2014 ) + 16.239 (Jun. 2014 ) + -7.988 (Sep. 2014 ) = €105.7 Mil.
Compuware's Cash Flow from Investing for the trailing twelve months (TTM) ended in Sep. 2014 was -9.34 (Dec. 2013 ) + 77.442 (Mar. 2014 ) + -12.676 (Jun. 2014 ) + -8.842 (Sep. 2014 ) = €46.6 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.
Compuware (FRA:CWR) 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. 2014, Compuware has a Sloan Ratio of -7.82%, indicating the company is in the safe zone and there is no funny business with accruals.
Compuware Sloan Ratio % Related Terms
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Compuware Corp a Michigan corporation was incorporated in 1973. The Company delivers services and software that enable its customers' important technologies to perform at their peak. It delivers the solutions through software that is installed and run on its customers' owned hardware and applications and through a Software as a Service ('SaaS') model accessed via its hosted networks. It has six business segments: Application Performance Managemen (APM), Mainframe, Changepoint, Uniface, Professional Services and Covisint Application Services ('Covisint'). Its Compuware Application Performance Management ('Compuware APM') consists of its solutions for optimizing the performance of web, non-web, mobile, streaming and cloud applications. Its Mainframe Software Products improve the productivity of development, maintenance and support teams in application analysis, testing, defect detection and remediation, fault management, file and data management, data compliance and application performance management in the IBM z/OS environment. Its Changepoint software combines professional services automation with project portfolio management capabilities to give customers complete visibility into projects, investments and resources for informed business planning and financial control. Its Uniface solution is Compuware's Rapid Application Development environment for building, renewing and integrating some of the complex enterprise applications. Its Covisint application services provide a cloud engagement platform for enabling organizations to securely connect, engage and collaborate with large, distributed communities of customers, business partners and suppliers. Its products and services are used by the IT departments and lines of business of a of commercial and government organizations. Its competitors include BMC Software Inc., CA, Inc., International Business Machines ('IBM'), Hewlett-Packard Company, Keynote Systems, Inc., Accenture, Computer Sciences Corporation, HP Enterprise Services, Analysts International Corporation and Infosys Technologies.
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