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.
Rapid Micro Biosystems's Sloan Ratio for the quarter that ended in Mar. 2024 was -38.94%.
Warning Sign:
When sloan ratio (-34.53)% higher than 25% or lower than -25%, earnings are more likely to be made up of accruals.
As of Mar. 2024, Rapid Micro Biosystems has a Sloan Ratio of -38.94%, indicating earnings are more likely to be made up of accruals.
Rapid Micro Biosystems 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.
Competitive Comparison of Rapid Micro Biosystems's Sloan Ratio %
For the Medical Devices subindustry, Rapid Micro Biosystems'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.
Rapid Micro Biosystems's Sloan Ratio % Distribution in the Medical Devices & Instruments Industry
For the Medical Devices & Instruments industry and Healthcare sector, Rapid Micro Biosystems's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Rapid Micro Biosystems's Sloan Ratio % falls into.
Rapid Micro Biosystems 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.
Rapid Micro Biosystems's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Rapid Micro Biosystems's Net Income for the trailing twelve months (TTM) ended in Mar. 2024 was -14.016 (Jun. 2023 ) + -13.392 (Sep. 2023 ) + -11.172 (Dec. 2023 ) + -13.322 (Mar. 2024 ) = $-51.90 Mil.
Rapid Micro Biosystems's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2024 was -9.19 (Jun. 2023 ) + -9.708 (Sep. 2023 ) + -9.497 (Dec. 2023 ) + -15.525 (Mar. 2024 ) = $-43.92 Mil.
Rapid Micro Biosystems's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2024 was 13.469 (Jun. 2023 ) + 4.766 (Sep. 2023 ) + 10.008 (Dec. 2023 ) + 13.515 (Mar. 2024 ) = $41.76 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.
Rapid Micro Biosystems (NAS:RPID) 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, Rapid Micro Biosystems has a Sloan Ratio of -38.94%, indicating earnings are more likely to be made up of accruals.
Rapid Micro Biosystems Sloan Ratio % Related Terms
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Rapid Micro Biosystems (Rapid Micro Biosystems) Business Description
Rapid Micro Biosystems Inc is an life sciences technology company providing mission critical automation solutions to facilitate the efficient manufacturing and fast, safe release of healthcare products such as biologics, vaccines, cell and gene therapies, and sterile injectables. The company's flagship Growth Direct platform automates and modernizes the antiquated, manual microbial quality control (MQC) testing workflows used in the pharmaceutical manufacturing operations across the globe. It derives revenue from development, manufacturing, marketing and selling Systems and related LIMS connection software, consumables and services.
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