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.
Canopy Growth's Sloan Ratio for the quarter that ended in Sep. 2024 was -34.04%.
Warning Sign:
When sloan ratio (-47.44)% higher than 25% or lower than -25%, earnings are more likely to be made up of accruals.
As of Sep. 2024, Canopy Growth has a Sloan Ratio of -34.04%, indicating earnings are more likely to be made up of accruals.
Canopy Growth Sloan Ratio % Historical Data
The historical data trend for Canopy Growth'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 Canopy Growth's Sloan Ratio %
For the Drug Manufacturers - Specialty & Generic subindustry, Canopy Growth'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.
Canopy Growth's Sloan Ratio % Distribution in the Drug Manufacturers Industry
For the Drug Manufacturers industry and Healthcare sector, Canopy Growth's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Canopy Growth's Sloan Ratio % falls into.
Canopy Growth 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.
Canopy Growth's Sloan Ratio for the fiscal year that ended in Mar. 2024 is calculated as
Canopy Growth's Net Income for the trailing twelve months (TTM) ended in Sep. 2024 was -148.183 (Dec. 2023 ) + -62.759 (Mar. 2024 ) + -86.181 (Jun. 2024 ) + -85.333 (Sep. 2024 ) = €-382.5 Mil.
Canopy Growth's Cash Flow from Operations for the trailing twelve months (TTM) ended in Sep. 2024 was -22.261 (Dec. 2023 ) + -14.993 (Mar. 2024 ) + -35.099 (Jun. 2024 ) + -35.819 (Sep. 2024 ) = €-108.2 Mil.
Canopy Growth's Cash Flow from Investing for the trailing twelve months (TTM) ended in Sep. 2024 was -0.418 (Dec. 2023 ) + 26.836 (Mar. 2024 ) + -22.389 (Jun. 2024 ) + 0.689 (Sep. 2024 ) = €4.7 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.
Canopy Growth (STU:11L) 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, Canopy Growth has a Sloan Ratio of -34.04%, indicating earnings are more likely to be made up of accruals.
Canopy Growth Sloan Ratio % Related Terms
Thank you for viewing the detailed overview of Canopy Growth's Sloan Ratio % provided by GuruFocus.com. Please click on the following links to see related term pages.
Canopy Growth, headquartered in Smiths Falls, Canada, cultivates and sells medicinal and recreational cannabis, and hemp, through a portfolio of brands that include Doja, 7ACRES, Tweed, and Deep Space. Its non-THC products include skincare products under Martha Stewart CBD and Storz & Bickel vaporizers. Canopy growth merged its US assets into a separately operated holding company, Canopy USA, which will not be consolidated into the Canadian company's financials.
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