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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.
When sloan ratio (-25.95)% higher than 25% or lower than -25%, earnings are more likely to be made up of accruals.
As of Jun. 2026, Ironwood Pharmaceuticals has a Sloan Ratio of 0.00%, indicating the company is in the safe zone and there is no funny business with accruals.
Ironwood Pharmaceuticals (NAS:IRWD) 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 Jun. 2026, Ironwood Pharmaceuticals has a Sloan Ratio of 0.00%, indicating the company is in the safe zone and there is no funny business with accruals.
Ironwood Pharmaceuticals Sloan Ratio % Related Terms
Ironwood Pharmaceuticals 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.
IRWD vs TLRY, AQST, ELTP: Sloan Ratio % Comparison
For the Drug Manufacturers - Specialty & Generic subindustry, Ironwood 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.
Ironwood Pharmaceuticals Sloan Ratio % vs Drug Manufacturers Industry
For the Drug Manufacturers industry and Healthcare sector, Ironwood Pharmaceuticals's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Ironwood Pharmaceuticals's Sloan Ratio % falls into.
Ironwood 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.
Ironwood Pharmaceuticals's Sloan Ratio for the fiscal year that ended in Dec. 2025 is calculated as
Ironwood Pharmaceuticals's Net Income for the trailing twelve months (TTM) ended in Jun. 2026 was 40.08 (Sep. 2025 ) + -2.276 (Dec. 2025 ) + 40.773 (Mar. 2026 ) + 51.291 (Jun. 2026 ) = $129.9 Mil.
Ironwood Pharmaceuticals's Cash Flow from Operations for the trailing twelve months (TTM) ended in Jun. 2026 was 47.583 (Sep. 2025 ) + 74.575 (Dec. 2025 ) + 5.121 (Mar. 2026 ) + 58.276 (Jun. 2026 ) = $185.6 Mil.
Ironwood Pharmaceuticals's Cash Flow from Investing for the trailing twelve months (TTM) ended in Jun. 2026 was -0.002 (Sep. 2025 ) + 0.001 (Dec. 2025 ) + 0 (Mar. 2026 ) + 0 (Jun. 2026 ) = $-0.0 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.
Ironwood Pharmaceuticals (IRWD) has a Sloan Ratio % of 0.00% as of Jun. 2026. Sloan ratio measures earnings quality based on the amount of accruals. View historical data on Ironwood Pharmaceuticals and its competitors.
Is Ironwood Pharmaceuticals' Sloan Ratio % too high?
Ironwood Pharmaceuticals' current Sloan Ratio % is 0.00%. Overall, Ironwood Pharmaceuticals has a GF Score™ of 65/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does Ironwood Pharmaceuticals' Sloan Ratio % compare to TLRY and AQST?
Ironwood Pharmaceuticals' Sloan Ratio % of 0.00% can be compared against companies in the Drug Manufacturers 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 Drug Manufacturers company?
A good Sloan Ratio % depends on the Drug Manufacturers 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 Ironwood Pharmaceuticals and its competitors. Ironwood Pharmaceuticals'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 Ironwood Pharmaceuticals stock overvalued right now?
Based on GuruFocus' analysis, Ironwood Pharmaceuticals (IRWD) is currently considered Fairly Valued. The stock's GF Value™ is $4.55, compared to a current price of $4.19 — trading 8% below its estimated fair value. The current Sloan Ratio % is 0.00%. Ironwood Pharmaceuticals' overall GF Score™ is 65/100 with 6 warning signs to review. 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 Ironwood Pharmaceuticals (IRWD), the current Sloan Ratio % is 0.00% as of Jun. 2026. 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.
Is Ironwood Pharmaceuticals (IRWD) Overvalued in 2026?
Based on GuruFocus' analysis, Ironwood Pharmaceuticals stock appears to be undervalued.
The current stock price of $4.19 is trading 8% below its estimated GF Value™ of $4.55.
GuruFocus considers Ironwood Pharmaceuticals to be Fairly Valued.
Key valuation signals for IRWD:
Sloan Ratio %: 0.00%
GF Value™: $4.55 vs. price of $4.19 (8% below fair value)
No single metric tells the full story. See the IRWD stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Ironwood Pharmaceuticals Inc is a biotechnology company developing and commercializing life-changing therapies for people living with gastrointestinal, or GI, and rare diseases. It is focused on the development and commercialization of inventive product opportunities in areas of unmet need, leveraging its demonstrated expertise and capabilities in GI and rare diseases. LINZESS is its commercial product. LINZESS is also available for the treatment of adults with IBS-C or CIC in Mexico, adults with IBS-C or chronic constipation in Japan, and adults with IBS-C in China. Linaclotide is available under the trademarked name CONSTELLA for the treatment of adults with IBS-C or CIC and pediatric patients ages 6-17 years old with FC in Canada, and to adults with IBS-C in certain European countries.
65GF Score
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