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.
Arecor Therapeutics's Sloan Ratio for the quarter that ended in Dec. 2023 was -60.04%.
Warning Sign:
When sloan ratio (-60.04)% higher than 25% or lower than -25%, earnings are more likely to be made up of accruals.
As of Dec. 2023, Arecor Therapeutics has a Sloan Ratio of -60.04%, indicating earnings are more likely to be made up of accruals.
Arecor Therapeutics Sloan Ratio % Historical Data
The historical data trend for Arecor Therapeutics'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 Arecor Therapeutics's Sloan Ratio %
For the Biotechnology subindustry, Arecor Therapeutics'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.
Arecor Therapeutics's Sloan Ratio % Distribution in the Biotechnology Industry
For the Biotechnology industry and Healthcare sector, Arecor Therapeutics's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Arecor Therapeutics's Sloan Ratio % falls into.
Arecor Therapeutics 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.
Arecor Therapeutics's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
For company reported semi-annually, GuruFocus uses latest two semi-annual data as the TTM data.
Arecor Therapeutics's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was -4.528 (Jun. 2023 ) + -4.026 (Dec. 2023 ) = £-8.55 Mil.
Arecor Therapeutics's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was -4.42 (Jun. 2023 ) + -1.421 (Dec. 2023 ) = £-5.84 Mil.
Arecor Therapeutics's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was 6.513 (Jun. 2023 ) + 0.007 (Dec. 2023 ) = £6.52 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.
Arecor Therapeutics (LSE:AREC) 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. 2023, Arecor Therapeutics has a Sloan Ratio of -60.04%, indicating earnings are more likely to be made up of accruals.
Arecor Therapeutics Sloan Ratio % Related Terms
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Arecor Therapeutics (LSE:AREC) Business Description
Arecor Therapeutics PLC is a focused biopharmaceutical company. The company is transforming patient care by bringing innovative medicines to market through the enhancement of existing therapeutic products. By applying an innovative proprietary formulation technology platform, Aresta. It is developing a portfolio of proprietary products in diabetes and other indications and working with pharmaceutical and biotechnology companies to deliver enhanced reformulations of their therapies. Geographically, it operates in the UK, Switzerland, the Rest of Europe, the USA, India, and the Rest of the World, out of which the majority is from the UK.
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