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.
Scilex Holding Co's Sloan Ratio for the quarter that ended in Sep. 2024 was -96.11%.
Warning Sign:
When sloan ratio (-92.09)% higher than 25% or lower than -25%, earnings are more likely to be made up of accruals.
As of Sep. 2024, Scilex Holding Co has a Sloan Ratio of -96.11%, indicating earnings are more likely to be made up of accruals.
Scilex Holding Co Sloan Ratio % Historical Data
The historical data trend for Scilex Holding Co'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 Scilex Holding Co's Sloan Ratio %
For the Drug Manufacturers - General subindustry, Scilex Holding Co'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.
Scilex Holding Co's Sloan Ratio % Distribution in the Drug Manufacturers Industry
For the Drug Manufacturers industry and Healthcare sector, Scilex Holding Co's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Scilex Holding Co'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.
Scilex Holding Co's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Scilex Holding Co's Net Income for the trailing twelve months (TTM) ended in Sep. 2024 was -21.4 (Dec. 2023 ) + -24.377 (Mar. 2024 ) + -37.582 (Jun. 2024 ) + -4.388 (Sep. 2024 ) = $-87.75 Mil.
Scilex Holding Co's Cash Flow from Operations for the trailing twelve months (TTM) ended in Sep. 2024 was -5.39 (Dec. 2023 ) + 9.391 (Mar. 2024 ) + 2.311 (Jun. 2024 ) + 5.113 (Sep. 2024 ) = $11.43 Mil.
Scilex Holding Co's Cash Flow from Investing for the trailing twelve months (TTM) ended in Sep. 2024 was -0.167 (Dec. 2023 ) + -0.15 (Mar. 2024 ) + -0.15 (Jun. 2024 ) + -2.18 (Sep. 2024 ) = $-2.65 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.
Scilex Holding Co (NAS:SCLX) 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 Sep. 2024, Scilex Holding Co has a Sloan Ratio of -96.11%, indicating earnings are more likely to be made up of accruals.
Scilex Holding Co Sloan Ratio % Related Terms
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Scilex Holding Co is focused on acquiring, developing, and commercializing non-opioid pain management products for the treatment of acute and chronic pain. The Company's commercial product, ZTlido (lidocaine topical system), is a prescription lidocaine topical product for the relief of pain associated with postherpetic neuralgia, which is a form of post-shingles nerve pain. It is focused on commercializing Gloperba (colchicine USP) an oral solution, a prophylactic treatment for painful gout flares in adults. The Company's three product candidates are SP-102 or SEMDEXA viscous gel formulation of a used corticosteroid for epidural injections, SP-103 a Phase 2, triple-strength formulation of ZTlido, and SP-104, 4.5 mg Delayed Burst Release Low Dose Naltrexone Hydrochloride (DBR-LDN) Capsule.
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