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Adobe (ADBE) Sloan Ratio %

: -9.28% (As of Feb. 2024)
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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.

Adobe's Sloan Ratio for the quarter that ended in Feb. 2024 was -9.28%.

As of Feb. 2024, Adobe has a Sloan Ratio of -9.28%, indicating the company is in the safe zone and there is no funny business with accruals.


Adobe Sloan Ratio % Historical Data

The historical data trend for Adobe'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.

* Premium members only.

Adobe Annual Data
Trend Nov14 Nov15 Nov16 Nov17 Nov18 Nov19 Nov20 Nov21 Nov22 Nov23
Sloan Ratio %
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -4.89 -0.22 4.14 -9.25 -8.90

Adobe Quarterly Data
May19 Aug19 Nov19 Feb20 May20 Aug20 Nov20 Feb21 May21 Aug21 Nov21 Feb22 May22 Aug22 Nov22 Feb23 May23 Aug23 Nov23 Feb24
Sloan Ratio % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -10.77 -11.90 -11.90 -8.90 -9.28

Competitive Comparison

For the Software - Infrastructure subindustry, Adobe'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.


Adobe Sloan Ratio % Distribution

For the Software industry and Technology sector, Adobe's Sloan Ratio % distribution charts can be found below:

* The bar in red indicates where Adobe's Sloan Ratio % falls into.



Adobe 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.

Adobe's Sloan Ratio for the fiscal year that ended in Nov. 2023 is calculated as

Sloan Ratio=(Net Income (A: Nov. 2023 )-Cash Flow from Operations (A: Nov. 2023 )
-Cash Flow from Investing (A: Nov. 2023 ))/Total Assets (A: Nov. 2023 )
=(5428-7302
-776)/29779
=-8.90%

Adobe's Sloan Ratio for the quarter that ended in Feb. 2024 is calculated as

Sloan Ratio=(Net Income (TTM)-Cash Flow from Operations (TTM))
-Cash Flow from Investing (TTM))/Total Assets (Q: Feb. 2024 )
=(4801-6783
-686)/28751
=-9.28%

Adobe's Net Income for the trailing twelve months (TTM) ended in Feb. 2024 was 1295 (May. 2023 ) + 1403 (Aug. 2023 ) + 1483 (Nov. 2023 ) + 620 (Feb. 2024 ) = $4,801 Mil.
Adobe's Cash Flow from Operations for the trailing twelve months (TTM) ended in Feb. 2024 was 2139 (May. 2023 ) + 1873 (Aug. 2023 ) + 1597 (Nov. 2023 ) + 1174 (Feb. 2024 ) = $6,783 Mil.
Adobe's Cash Flow from Investing for the trailing twelve months (TTM) ended in Feb. 2024 was 322 (May. 2023 ) + 145 (Aug. 2023 ) + 153 (Nov. 2023 ) + 66 (Feb. 2024 ) = $686 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.


Adobe  (NAS:ADBE) 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 Feb. 2024, Adobe has a Sloan Ratio of -9.28%, indicating the company is in the safe zone and there is no funny business with accruals.


Adobe Sloan Ratio % Related Terms

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Adobe (ADBE) Business Description

Address
345 Park Avenue, San Jose, CA, USA, 95110-2704
Adobe provides content creation, document management, and digital marketing and advertising software and services to creative professionals and marketers for creating, managing, delivering, measuring, optimizing and engaging with compelling content multiple operating systems, devices and media. The company operates with three segments: digital media content creation, digital experience for marketing solutions, and publishing for legacy products (less than 5% of revenue).
Executives
Mark S. Garfield officer: VP, CAO & Corp. Controller 345 PARK AVENUE, SAN JOSE CA 95110-2704
Amy Banse director 345 PARK AVENUE, SAN JOSE CA 95110
David Wadhwani officer: SVP & GM, Digital Media ADOBE INC., 345 PARK AVE, SAN JOSE CA 95110
Shantanu Narayen director, officer: President and CEO 345 PARK AVENUE, SAN JOSE CA 95110
Daniel Durn officer: EVP and CFO C/O APPLIED MATERIALS, INC., 3050 BOWERS AVENUE, P.O. BOX 58039, SANTA CLARA CA 95052-8039
Scott Belsky officer: EVP, Chief Product Officer 345 PARK AVENUE, SAN JOSE CA 95110
Cristiano R Amon director 5775 MOREHOUSE DRIVE, SAN DIEGO CA 92121
John E Warnock director, other: Co-Chairman of the Board C/O ADOBE SYSTEMS INC, 345 PARK AVENUE P O BOX 2704, SAN JOSE CA 95110-2704
Dana Rao officer: EVP, Gen. Counsel & Secretary 345 PARK AVE, SAN JOSE CA 95110
Ann Lewnes officer: SVP, Chief Marketing Officer 345 PARK AVENUE, SAN JOSE CA 95110
David A Ricks director LILLY CORPORATE CENTER, INDIANAPOLIS IN 46285
M. Brett Biggs director 702 SW 8TH STREET, BENTONVILLE AR 72716
Laura Desmond director 345 PARK AVENUE, SAN JOSE CA 95110
Spencer Adam Neumann director SIERRA INCOME CORPORATION, 375 PARK AVE., SUITE 3304, NEW YORK NY 10152
Gloria Chen officer: EVP, Strategy & Growth 345 PARK AVENUE, SAN JOSE CA 95110