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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. 2016, Future Science Holdings has a Sloan Ratio of 0.00%, indicating the company is in the safe zone and there is no funny business with accruals.
Future Science Holdings (OTCPK:FUTS) 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. 2016, Future Science Holdings has a Sloan Ratio of 0.00%, indicating the company is in the safe zone and there is no funny business with accruals.
Future Science Holdings Sloan Ratio % Related Terms
Future Science Holdings 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.
Future Science Holdings Sloan Ratio % Competitor Comparison
For the Shell Companies subindustry, Future Science Holdings'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.
Future Science Holdings Sloan Ratio % vs Diversified Financial Services Industry
For the Diversified Financial Services industry and Financial Services sector, Future Science Holdings's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Future Science Holdings's Sloan Ratio % falls into.
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.
Future Science Holdings's Sloan Ratio for the fiscal year that ended in Dec. 2015 is calculated as
Future Science Holdings's Net Income for the trailing twelve months (TTM) ended in Sep. 2016 was -0.708 (Dec. 2015 ) + -0.737 (Mar. 2016 ) + -0.717 (Jun. 2016 ) + -0.686 (Sep. 2016 ) = $-2.85 Mil.
Future Science Holdings's Cash Flow from Operations for the trailing twelve months (TTM) ended in Sep. 2016 was -0.761 (Dec. 2015 ) + -0.38 (Mar. 2016 ) + -0.859 (Jun. 2016 ) + -0.478 (Sep. 2016 ) = $-2.48 Mil.
Future Science Holdings's Cash Flow from Investing for the trailing twelve months (TTM) ended in Sep. 2016 was 0 (Dec. 2015 ) + 0 (Mar. 2016 ) + 0 (Jun. 2016 ) + 0 (Sep. 2016 ) = $0.00 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.
Future Science Holdings (FUTS) has a Sloan Ratio % of 0.00% as of Sep. 2016. Sloan ratio measures earnings quality based on the amount of accruals. View historical data on Future Science Holdings and its competitors.
Is Future Science Holdings' Sloan Ratio % too high?
Future Science Holdings' current Sloan Ratio % is 0.00%.
How does Future Science Holdings' Sloan Ratio % compare to competitors?
Future Science Holdings' Sloan Ratio % of 0.00% can be compared against companies in the Diversified Financial Services industry. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Sloan Ratio % for a Diversified Financial Services company?
A good Sloan Ratio % depends on the Diversified Financial Services industry context. However, Sloan Ratio % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Sloan Ratio % mean?
A high Sloan Ratio % can signal that a stock is expensive relative to its fundamentals. Sloan ratio measures earnings quality based on the amount of accruals. View historical data on Future Science Holdings and its competitors. Future Science Holdings's current Sloan Ratio % is 0.00%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Future Science Holdings stock overvalued right now?
Future Science Holdings (FUTS) has a current Sloan Ratio % of 0.00%. The current Sloan Ratio % is 0.00%. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Sloan Ratio % calculated?
Sloan Ratio % is calculated from a company's financial statements. For Future Science Holdings (FUTS), the current Sloan Ratio % is 0.00% as of Sep. 2016. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Future Science Holdings Inc is a technology company with a focus on developing or acquiring control and holding companies with synergies in technology. The company is searching for new investment opportunities, with a principal business objective of starting up a new business, acquiring all or part of an existing business, and a combination with an existing business in the technology sector.
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