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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.
Provention Bio's Sloan Ratio for the quarter that ended in Dec. 2022 was 21.10%.
As of Dec. 2022, Provention Bio has a Sloan Ratio of 21.10%, indicating there is a warning stage of accrual build up.
The historical data trend for Provention Bio'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.
Provention Bio Annual Data | ||||||||||||||||
Trend | Dec16 | Dec17 | Dec18 | Dec19 | Dec20 | Dec21 | Dec22 | |||||||||
Sloan Ratio % | Get a 7-Day Free Trial | - | 45.39 | -36.90 | 8.88 | 21.10 |
Provention Bio Quarterly Data | ||||||||||||||||||||
Mar18 | Jun18 | Sep18 | Dec18 | Mar19 | Jun19 | Sep19 | Dec19 | Mar20 | Jun20 | Sep20 | Dec20 | Mar21 | Jun21 | Sep21 | Dec21 | Mar22 | Jun22 | Sep22 | Dec22 | |
Sloan Ratio % | Get a 7-Day Free Trial | 8.88 | 2.97 | 3.05 | 30.59 | 21.10 |
For the Biotechnology subindustry, Provention Bio'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.
For the Biotechnology industry and Healthcare sector, Provention Bio's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Provention Bio'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.
Provention Bio's Sloan Ratio for the fiscal year that ended in Dec. 2022 is calculated as
Sloan Ratio | = | (Net Income (A: Dec. 2022 ) | - | Cash Flow from Operations (A: Dec. 2022 ) |
- | Cash Flow from Investing (A: Dec. 2022 )) | / | Total Assets (A: Dec. 2022 ) | |
= | (-113.565 | - | -75.408 | |
- | -88.127) | / | 236.856 | |
= | 21.10% |
Provention Bio's Sloan Ratio for the quarter that ended in Dec. 2022 is calculated as
Sloan Ratio | = | (Net Income (TTM) | - | Cash Flow from Operations (TTM)) |
- | Cash Flow from Investing (TTM)) | / | Total Assets (Q: Dec. 2022 ) | |
= | (-113.565 | - | -75.408 | |
- | -88.127) | / | 236.856 | |
= | 21.10% |
Provention Bio's Net Income for the trailing twelve months (TTM) ended in Dec. 2022 was -21.968 (Mar. 2022 ) + -29.687 (Jun. 2022 ) + -28.633 (Sep. 2022 ) + -33.277 (Dec. 2022 ) = $-113.57 Mil. Provention Bio's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2022 was -15.03 (Mar. 2022 ) + -28.436 (Jun. 2022 ) + -23.967 (Sep. 2022 ) + -7.975 (Dec. 2022 ) = $-75.41 Mil. Provention Bio's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2022 was 9.6 (Mar. 2022 ) + -0.226 (Jun. 2022 ) + -46.228 (Sep. 2022 ) + -51.273 (Dec. 2022 ) = $-88.13 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.
Provention Bio (NAS:PRVB) 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.
According to How to Beat the Market with the Sloan Ratio:
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. 2022, Provention Bio has a Sloan Ratio of 21.10%, indicating there is a warning stage of accrual build up.
Thank you for viewing the detailed overview of Provention Bio's Sloan Ratio % provided by GuruFocus.com. Please click on the following links to see related term pages.
Sessa Capital (master), L.p. | 10 percent owner | 888 SEVENTH AVENUE, 30TH FLOOR, NEW YORK NY 10019 |
Ashleigh Palmer | director, 10 percent owner, officer: President and CEO | PROVENTION BIO, INC., 110 OLD DRIFTWAY LANE, LEBANON NJ 08833 |
Francisco Leon | director, 10 percent owner, officer: Chief Scientific Officer | C/O PROVENTION BIO, INC., 110 OLD DRIFTWAY LANE, LEBANON NJ 08833 |
Jason Hoitt | officer: Chief Commercial Officer | C/O DOVA PHARMACEUTICALS, INC., 240 LEIGH FARM ROAD, SUITE 245, DURHAM NC 27707 |
Justin Vogel | officer: Chief Accounting Officer | C/O PROVENTION BIO, INC., 55 BROAD STREET, RED BANK NJ 07701 |
Rita Jain | director | C/O AKEBIA THERAPEUTICS, INC., 245 FIRST STREET, SUITE 1100, CAMBRIDGE MA 02142 |
Sarah O'brien | officer: Chief People Officer | C/O PROVENTION BIO, INC., 55 BROAD STREET, RED BANK NJ 07701 |
Sessa Capital Im, L.p. | 10 percent owner | 888 SEVENTH AVENUE, 30TH FLOOR, NEW YORK NY 10019 |
John Petry | 10 percent owner | 888 SEVENTH AVENUE, 30TH FLOOR, NEW YORK NY 10019 |
Sessa Capital Gp, Llc | 10 percent owner | 888 SEVENTH AVENUE, 30TH FLOOR, NEW YORK NY 10019 |
Sessa Capital Im Gp, Llc | 10 percent owner | 888 SEVENTH AVENUE, 30TH FLOOR, NEW YORK NY 10019 |
Miyoko Christina Yi | officer: Chief Operations Officer | C/O PROVENTION BIO, INC., 55 BROAD STREET, 2ND FLOOR, RED BANK NJ 07701 |
Benedict Osorio | officer: Chief Quality Officer | ONE WORLD TRADE CENTER, 47TH FLOOR, SUITE J, NEW YORK NY 10007 |
Eleanor Ramos | officer: Chief Medical Officer & COO | ZYMOGENETICS, INC., 1201 EASTLAKE AVENUE E, SEATTLE WA 98102 |
Thierry Chauche | officer: Chief Financial Officer | C/O PROVENTION BIO, INC., 55 BROAD STREET, 2ND FLOOR, RED BANK NJ 07701 |
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