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.
Lexaria Bioscience's Sloan Ratio for the quarter that ended in Feb. 2024 was -0.49%.
As of Feb. 2024, Lexaria Bioscience has a Sloan Ratio of -0.49%, indicating the company is in the safe zone and there is no funny business with accruals.
Lexaria Bioscience Sloan Ratio % Historical Data
The historical data trend for Lexaria Bioscience'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 Lexaria Bioscience's Sloan Ratio %
For the Biotechnology subindustry, Lexaria Bioscience'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.
Lexaria Bioscience's Sloan Ratio % Distribution in the Biotechnology Industry
For the Biotechnology industry and Healthcare sector, Lexaria Bioscience's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Lexaria Bioscience's Sloan Ratio % falls into.
Lexaria Bioscience 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.
Lexaria Bioscience's Sloan Ratio for the fiscal year that ended in Aug. 2023 is calculated as
Lexaria Bioscience's Net Income for the trailing twelve months (TTM) ended in Feb. 2024 was -2.372 (May. 2023 ) + -1.239 (Aug. 2023 ) + -1.179 (Nov. 2023 ) + -0.65 (Feb. 2024 ) = $-5.44 Mil.
Lexaria Bioscience's Cash Flow from Operations for the trailing twelve months (TTM) ended in Feb. 2024 was -1.786 (May. 2023 ) + -1.622 (Aug. 2023 ) + -1.182 (Nov. 2023 ) + -0.62 (Feb. 2024 ) = $-5.21 Mil.
Lexaria Bioscience's Cash Flow from Investing for the trailing twelve months (TTM) ended in Feb. 2024 was -0.034 (May. 2023 ) + -0.068 (Aug. 2023 ) + -0.04 (Nov. 2023 ) + -0.057 (Feb. 2024 ) = $-0.20 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.
Lexaria Bioscience (NAS:LEXX) 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 Feb. 2024, Lexaria Bioscience has a Sloan Ratio of -0.49%, indicating the company is in the safe zone and there is no funny business with accruals.
Lexaria Bioscience Sloan Ratio % Related Terms
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Lexaria Bioscience (Lexaria Bioscience) Business Description
Lexaria Bioscience Corp's patented drug delivery technology, DehydraTECH improves the way active pharmaceutical ingredients enter the bloodstream by promoting more effective oral delivery. DehydraTECH has the ability to increase bio-absorption with cannabinoids and nicotine by 5-10x and, in some instances with cannabinoids by as much as 27x compared to standard industry formulations, reduce the time of onset from 1-2 hours to minutes, and mask unwanted tastes. DehydraTECH has also evidenced an ability to deliver some drugs more effectively across the blood brain barrier. The Company has four reportable segments: Intellectual Property Licensing, B2B Production, Research and Development and Corporate. It earns maximum revenue from Intellectual Property Licensing.
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