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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.
Merck KGaA's Sloan Ratio for the quarter that ended in Mar. 2026 was 5.65%.
As of Mar. 2026, Merck KGaA has a Sloan Ratio of 5.65%, indicating the company is in the safe zone and there is no funny business with accruals.
Merck KGaA (XSWX:MER) 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. 2026, Merck KGaA has a Sloan Ratio of 5.65%, indicating the company is in the safe zone and there is no funny business with accruals.
Merck KGaA Sloan Ratio % Related Terms
Merck KGaA Sloan Ratio % Historical Data
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The historical data trend for Merck KGaA'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.
XSWX:MER vs ZTS, UTHR, VTRS: Sloan Ratio % Comparison
For the Drug Manufacturers - Specialty & Generic subindustry, Merck KGaA'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.
Merck KGaA Sloan Ratio % vs Drug Manufacturers Industry
For the Drug Manufacturers industry and Healthcare sector, Merck KGaA's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Merck KGaA'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.
Merck KGaA's Sloan Ratio for the fiscal year that ended in Dec. 2025 is calculated as
Merck KGaA's Net Income for the trailing twelve months (TTM) ended in Mar. 2026 was 611.541 (Jun. 2025 ) + 842.819 (Sep. 2025 ) + 297.671 (Dec. 2025 ) + 599.804 (Mar. 2026 ) = CHF2,352 Mil.
Merck KGaA's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2026 was 531.816 (Jun. 2025 ) + 1418.404 (Sep. 2025 ) + 1204.681 (Dec. 2025 ) + 744.522 (Mar. 2026 ) = CHF3,899 Mil.
Merck KGaA's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2026 was -134.126 (Jun. 2025 ) + -2911.558 (Sep. 2025 ) + -544.02 (Dec. 2025 ) + -687.181 (Mar. 2026 ) = CHF-4,277 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.
Merck KGaA (XSWX:MER) has a Sloan Ratio % of 5.65% as of Mar. 2026. Sloan ratio measures earnings quality based on the amount of accruals. View historical data on Merck KGaA and its competitors.
Is Merck KGaA's Sloan Ratio % too high?
Merck KGaA's current Sloan Ratio % is 5.65%. Overall, Merck KGaA has a GF Score™ of 84/100, reflecting its overall financial health beyond just this single metric.
How does Merck KGaA's Sloan Ratio % compare to ZTS and UTHR?
Merck KGaA's Sloan Ratio % of 5.65% can be compared against companies in the Drug Manufacturers industry. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Sloan Ratio % for a Drug Manufacturers company?
A good Sloan Ratio % depends on the Drug Manufacturers industry context. However, Sloan Ratio % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Sloan Ratio % mean?
A high Sloan Ratio % can signal that a stock is expensive relative to its fundamentals. Sloan ratio measures earnings quality based on the amount of accruals. View historical data on Merck KGaA and its competitors. Merck KGaA's current Sloan Ratio % is 5.65%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Merck KGaA stock overvalued right now?
Merck KGaA (XSWX:MER) has a current Sloan Ratio % of 5.65%. The stock's GF Value™ is CHF134.55, compared to a current price of CHF130.30 — trading 3.2% below its estimated fair value. The current Sloan Ratio % is 5.65%. Merck KGaA's overall GF Score™ is 84/100 with 10 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Sloan Ratio % calculated?
Sloan Ratio % is calculated from a company's financial statements. For Merck KGaA (XSWX:MER), the current Sloan Ratio % is 5.65% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Merck KGaA (XSWX:MER) Overvalued in 2026?
Based on GuruFocus' analysis, Merck KGaA stock appears to be undervalued.
The current stock price of CHF130.30 is trading 3.2% below its estimated GF Value™ of CHF134.55.
Key valuation signals for XSWX:MER:
Sloan Ratio %: 5.65%
GF Value™: CHF134.55 vs. price of CHF130.30 (3.2% below fair value)
No single metric tells the full story. See the XSWX:MER stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Merck KGaA operates in three main segments: Life Science, Electronics, and Healthcare. The Life Science segment provides laboratory consumables and instruments to researchers in academia and applied fields, including the biopharmaceutical industry. The Electronics segment offers specialty materials to manufacture a variety of products, such as semiconductors and flat-screen televisions. In the healthcare segment, Merck develops, manufactures, and sells branded pharmaceuticals with significant therapeutic concentrations in oncology, multiple sclerosis, and fertility. In 1995, the E. Merck KG family publicly sold part of the company, resulting in the current 30% public ownership of the firm.
84GF Score
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