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.
New Frontier Health's Sloan Ratio for the quarter that ended in Dec. 2020 was -2.36%.
As of Dec. 2020, New Frontier Health has a Sloan Ratio of -2.36%, indicating the company is in the safe zone and there is no funny business with accruals.
New Frontier Health Sloan Ratio % Historical Data
The historical data trend for New Frontier Health'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 New Frontier Health's Sloan Ratio %
For the Medical Care Facilities subindustry, New Frontier Health'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.
New Frontier Health's Sloan Ratio % Distribution in the Healthcare Providers & Services Industry
For the Healthcare Providers & Services industry and Healthcare sector, New Frontier Health's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where New Frontier Health's Sloan Ratio % falls into.
New Frontier Health 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.
New Frontier Health's Sloan Ratio for the fiscal year that ended in Dec. 2020 is calculated as
New Frontier Health's Net Income for the trailing twelve months (TTM) ended in Dec. 2020 was -22.815 (Mar. 2020 ) + -10.423 (Jun. 2020 ) + -9.416 (Sep. 2020 ) + -14.487 (Dec. 2020 ) = $-57.1 Mil.
New Frontier Health's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2020 was -33.761 (Mar. 2020 ) + 54.586 (Jun. 2020 ) + 7.129 (Sep. 2020 ) + 10.265 (Dec. 2020 ) = $38.2 Mil.
New Frontier Health's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2020 was -2.084 (Mar. 2020 ) + -15.901 (Jun. 2020 ) + -12.965 (Sep. 2020 ) + -15.928 (Dec. 2020 ) = $-46.9 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.
New Frontier Health (NYSE:NFH) 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. 2020, New Frontier Health has a Sloan Ratio of -2.36%, indicating the company is in the safe zone and there is no funny business with accruals.
New Frontier Health Sloan Ratio % Related Terms
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New Frontier Health (New Frontier Health) Business Description
New Frontier Health Corp is a comprehensive private medical service platform. Through its subsidiary, it provides healthcare services throughout the life cycle in China. The firm's operating segments are Operating assets Tier 1, and Operating assets Tier 2 and other assets and Expansion assets. Tier 1 segment consists of the group's existing general hospitals and clinics located in tier 1 cities in China, such as Beijing and Shanghai whereas, tier 2 and other assets segment consists of the group's existing general hospitals and clinics located in tier 2 cities in China, such as Tianjin and Qingdao, and specialized healthcare facilities. The company generates a majority of its revenue from the Tier 1 segment.
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