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.
Nuvalent's Sloan Ratio for the quarter that ended in Dec. 2024 was 43.60%.
Warning Sign:
When sloan ratio (43.6)% higher than 25% or lower than -25%, earnings are more likely to be made up of accruals.
As of Dec. 2024, Nuvalent has a Sloan Ratio of 43.60%, indicating earnings are more likely to be made up of accruals.
Nuvalent Sloan Ratio % Historical Data
The historical data trend for Nuvalent'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 Nuvalent's Sloan Ratio %
For the Biotechnology subindustry, Nuvalent'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.
Nuvalent's Sloan Ratio % Distribution in the Biotechnology Industry
For the Biotechnology industry and Healthcare sector, Nuvalent's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Nuvalent's Sloan Ratio % falls into.
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.
Nuvalent's Sloan Ratio for the fiscal year that ended in Dec. 2024 is calculated as
Nuvalent's Net Income for the trailing twelve months (TTM) ended in Dec. 2024 was -44.482 (Mar. 2024 ) + -57.166 (Jun. 2024 ) + -84.345 (Sep. 2024 ) + -74.763 (Dec. 2024 ) = $-260.76 Mil.
Nuvalent's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2024 was -36.087 (Mar. 2024 ) + -41.16 (Jun. 2024 ) + -45.817 (Sep. 2024 ) + -62 (Dec. 2024 ) = $-185.06 Mil.
Nuvalent's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2024 was -206.771 (Mar. 2024 ) + 16.208 (Jun. 2024 ) + -212.906 (Sep. 2024 ) + -170.045 (Dec. 2024 ) = $-573.51 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.
Nuvalent (NAS:NUVL) 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. 2024, Nuvalent has a Sloan Ratio of 43.60%, indicating earnings are more likely to be made up of accruals.
Nuvalent Sloan Ratio % Related Terms
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Nuvalent Inc is a clinical-stage biopharmaceutical company focused on creating precisely targeted therapies for patients with cancer. All of the Company's operations are in the United States. The company is engaged in developing small molecules that are designed to overcome the limitations of existing therapies for clinically proven kinase targets. The product candidates of the company include NVL-520, which is being developed for patients with ROS1-positive non-small cell lung cancer (NSCLC), NVL-655, which is being developed for patients with anaplastic lymphoma kinase (ALK)-positive NSCLC, NVL-330, is a brain-penetrant human epidermal growth factor receptor 2 (HER2)-selective inhibitor designed to address the combined medical need of treating tumors driven by HER2ex20.
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