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.
Leidos Holdings's Sloan Ratio for the quarter that ended in Mar. 2024 was -6.41%.
As of Mar. 2024, Leidos Holdings has a Sloan Ratio of -6.41%, indicating the company is in the safe zone and there is no funny business with accruals.
Leidos Holdings Sloan Ratio % Historical Data
The historical data trend for Leidos Holdings'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 Leidos Holdings's Sloan Ratio %
For the Information Technology Services subindustry, Leidos Holdings'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.
Leidos Holdings's Sloan Ratio % Distribution in the Software Industry
For the Software industry and Technology sector, Leidos Holdings's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Leidos Holdings's Sloan Ratio % falls into.
Leidos Holdings 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.
Leidos Holdings's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Leidos Holdings's Net Income for the trailing twelve months (TTM) ended in Mar. 2024 was 207 (Jun. 2023 ) + -399 (Sep. 2023 ) + 229 (Dec. 2023 ) + 284 (Mar. 2024 ) = $321 Mil.
Leidos Holdings's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2024 was 164 (Jun. 2023 ) + 795 (Sep. 2023 ) + 304 (Dec. 2023 ) + 63 (Mar. 2024 ) = $1,326 Mil.
Leidos Holdings's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2024 was -44 (Jun. 2023 ) + -52 (Sep. 2023 ) + -76 (Dec. 2023 ) + -12 (Mar. 2024 ) = $-184 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.
Leidos Holdings (NYSE:LDOS) 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 Mar. 2024, Leidos Holdings has a Sloan Ratio of -6.41%, indicating the company is in the safe zone and there is no funny business with accruals.
Leidos Holdings Sloan Ratio % Related Terms
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Leidos Holdings (Leidos Holdings) Business Description
Leidos Holdings Inc is a technology, engineering, and science company that provides services and solutions in the defense, intelligence, civil and health markets, both domestically and internationally. Company customer includes the U.S. Department of Defense ("DoD"), the U.S. Intelligence Community, the U.S. Department of Homeland Security ("DHS"), the Federal Aviation Administration ("FAA"), the Department of Veterans Affairs ("VA"), and many other U.S. civilian, state and local government agencies, etc. The company is engaged in three reportable segments; Defense Solutions, Civil, and Health. Defense Solutions provides leading-edge and technologically advanced services, solutions, and products to a broad customer base. It generates key revenue from Defense Solutions.
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