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.
Lannett Co's Sloan Ratio for the quarter that ended in Mar. 2023 was -59.58%.
Warning Sign:
When sloan ratio (-46.77)% higher than 25% or lower than -25%, earnings are more likely to be made up of accruals.
As of Mar. 2023, Lannett Co has a Sloan Ratio of -59.58%, indicating earnings are more likely to be made up of accruals.
Lannett Co Sloan Ratio % Historical Data
The historical data trend for Lannett Co'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 Lannett Co's Sloan Ratio %
For the Drug Manufacturers - Specialty & Generic subindustry, Lannett Co'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.
Lannett Co's Sloan Ratio % Distribution in the Drug Manufacturers Industry
For the Drug Manufacturers industry and Healthcare sector, Lannett Co's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Lannett Co's Sloan Ratio % falls into.
Lannett Co 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.
Lannett Co's Sloan Ratio for the fiscal year that ended in Jun. 2022 is calculated as
Lannett Co's Net Income for the trailing twelve months (TTM) ended in Mar. 2023 was -93.295 (Jun. 2022 ) + -28.019 (Sep. 2022 ) + -36.308 (Dec. 2022 ) + -101.47 (Mar. 2023 ) = $-259.1 Mil.
Lannett Co's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2023 was -19.01 (Jun. 2022 ) + -11.311 (Sep. 2022 ) + -19.218 (Dec. 2022 ) + -7.92 (Mar. 2023 ) = $-57.5 Mil.
Lannett Co's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2023 was 0.6 (Jun. 2022 ) + 1.431 (Sep. 2022 ) + -2.911 (Dec. 2022 ) + -1.4 (Mar. 2023 ) = $-2.3 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.
Lannett Co (OTCPK:LCINQ) 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 Mar. 2023, Lannett Co has a Sloan Ratio of -59.58%, indicating earnings are more likely to be made up of accruals.
Lannett Co Sloan Ratio % Related Terms
Thank you for viewing the detailed overview of Lannett Co's Sloan Ratio % provided by GuruFocus.com. Please click on the following links to see related term pages.
Lannett Co Inc develops, manufactures, packages, markets, and distributes generic versions of brand pharmaceutical products. It offers solid oral, extended-release, topical, nasal, and oral solution finished dosage forms of drugs that address a range of therapeutic areas, as well as ophthalmic, patch, foam, buccal, sublingual, soft gel, and injectable dosages. In addition, the company also provides its products for various medical indications comprising glaucoma, gastrointestinal, migraine, obesity, respiratory, and others. It operates in the segment of generic pharmaceuticals. Its customers include generic pharmaceutical distributors, drug wholesalers, chain drug stores, private label distributors, mail-order pharmacies, and others.
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
Portfolio Contest
LCINQ has been successfully added to your 