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 Cadence Pharmaceuticals,'s Sloan Ratio %
For the Biotechnology subindustry, Cadence Pharmaceuticals,'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.
Cadence Pharmaceuticals,'s Sloan Ratio % Distribution in the Biotechnology Industry
For the Biotechnology industry and Healthcare sector, Cadence Pharmaceuticals,'s Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Cadence Pharmaceuticals,'s Sloan Ratio % falls into.
Cadence Pharmaceuticals, 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.
Cadence Pharmaceuticals,'s Sloan Ratio for the fiscal year that ended in Dec. 2013 is calculated as
Cadence Pharmaceuticals,'s Net Income for the trailing twelve months (TTM) ended in Dec. 2013 was -1.052 (Mar. 2013 ) + -9.001 (Jun. 2013 ) + -5.19 (Sep. 2013 ) + -3.006 (Dec. 2013 ) = €-18.25 Mil.
Cadence Pharmaceuticals,'s Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2013 was -9.66 (Mar. 2013 ) + -6.186 (Jun. 2013 ) + -2.368 (Sep. 2013 ) + 0.472 (Dec. 2013 ) = €-17.74 Mil.
Cadence Pharmaceuticals,'s Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2013 was 11.293 (Mar. 2013 ) + 1.034 (Jun. 2013 ) + 0.061 (Sep. 2013 ) + -0.31 (Dec. 2013 ) = €12.08 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.
Cadence Pharmaceuticals, (FRA:QEW) 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. 2013, Cadence Pharmaceuticals, has a Sloan Ratio of -18.99%, indicating there is a warning stage of accrual build up.
Cadence Pharmaceuticals, Sloan Ratio % Related Terms
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Cadence Pharmaceuticals, (FRA:QEW) Business Description
Cadence Pharmaceuticals, Inc. is a biopharmaceutical company focused on in-licensing, developing and commercializing product candidates mainly for use in the hospital setting. The Company's main activities are conducting research and development activities as well as conducting clinical trials. The company has in-licensed rights to products: Acetavance, an intravenous formulation of acetaminophen, and Omigard, an omiganan pentahydrochloride 1% aqueous gel. It in-licensed the exclusive United States, or U.S., and Canadian rights to Acetavance from Bristol-Myers Squibb Company, or BMS, which markets this product candidate in Europe and other markets for the treatment of acute pain and fever under the brand name Perfalgan. The Company is developing Acetavance, a proprietary intravenous formulation of acetaminophen, for the U.S. market for the treatment of acute pain and fever in adults and children. In its oral form, acetaminophen is the most widely used drug for the treatment of pain and fever in the U.S. The Company's licensor, BMS, currently markets this proprietary intravenous formulation of acetaminophen for the treatment of acute pain and fever in Europe and several other markets outside the U.S, where it is known as paracetamol and is marketed under the brand name Perfalgan.
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