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.
Akamai Technologies's Sloan Ratio for the quarter that ended in Dec. 2023 was 10.58%.
As of Dec. 2023, Akamai Technologies has a Sloan Ratio of 10.58%, indicating there is a warning stage of accrual build up.
Akamai Technologies Sloan Ratio % Historical Data
The historical data trend for Akamai Technologies'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.
For the Software - Infrastructure subindustry, Akamai Technologies'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.
Akamai Technologies Sloan Ratio % Distribution
For the Software industry and Technology sector, Akamai Technologies's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Akamai Technologies's Sloan Ratio % falls into.
Akamai Technologies 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.
Akamai Technologies's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Akamai Technologies's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was 97.106 (Mar. 2023 ) + 128.816 (Jun. 2023 ) + 160.542 (Sep. 2023 ) + 161.165 (Dec. 2023 ) = $548 Mil.
Akamai Technologies's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was 233.499 (Mar. 2023 ) + 366.311 (Jun. 2023 ) + 359.436 (Sep. 2023 ) + 389.193 (Dec. 2023 ) = $1,348 Mil.
Akamai Technologies's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -119.888 (Mar. 2023 ) + -248.354 (Jun. 2023 ) + -1164.163 (Sep. 2023 ) + -315.833 (Dec. 2023 ) = $-1,848 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.
Akamai Technologies (NAS:AKAM) 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 Dec. 2023, Akamai Technologies has a Sloan Ratio of 10.58%, indicating there is a warning stage of accrual build up.
Akamai Technologies Sloan Ratio % Related Terms
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Akamai Technologies (Akamai Technologies) Business Description
Akamai operates a content delivery network, or CDN, which entails locating servers at the edges of networks so its customers, which store content on Akamai servers, can reach their own customers faster, more securely, and with better quality. Akamai has over 325,000 servers distributed over 4,100 points of presence in more than 1,000 cities worldwide. Its customers generally include media companies, which stream video content or make video games available for download, and other enterprises that run interactive or high-traffic websites, such as e-commerce firms and financial institutions. Akamai also has a significant security business, which is integrated with its core delivery and computing businesses to protect customers from cyberthreats.
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