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.
Alarm.com Holdings's Sloan Ratio for the quarter that ended in Dec. 2023 was -2.01%.
As of Dec. 2023, Alarm.com Holdings has a Sloan Ratio of -2.01%, indicating the company is in the safe zone and there is no funny business with accruals.
Alarm.com Holdings Sloan Ratio % Historical Data
The historical data trend for Alarm.com Holdings'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 Alarm.com Holdings's Sloan Ratio %
For the Software - Application subindustry, Alarm.com Holdings'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.
Alarm.com Holdings's Sloan Ratio % Distribution in the Software Industry
For the Software industry and Technology sector, Alarm.com Holdings's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Alarm.com Holdings's Sloan Ratio % falls into.
Alarm.com Holdings 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.
Alarm.com Holdings's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Alarm.com Holdings's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was 14.416 (Mar. 2023 ) + 15.799 (Jun. 2023 ) + 19.524 (Sep. 2023 ) + 31.304 (Dec. 2023 ) = $81.0 Mil.
Alarm.com Holdings's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was -3.521 (Mar. 2023 ) + 36.788 (Jun. 2023 ) + 62.826 (Sep. 2023 ) + 39.872 (Dec. 2023 ) = $136.0 Mil.
Alarm.com Holdings's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -12.943 (Mar. 2023 ) + -6.648 (Jun. 2023 ) + -2.144 (Sep. 2023 ) + -4.231 (Dec. 2023 ) = $-26.0 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.
Alarm.com Holdings (NAS:ALRM) 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, Alarm.com Holdings has a Sloan Ratio of -2.01%, indicating the company is in the safe zone and there is no funny business with accruals.
Alarm.com Holdings Sloan Ratio % Related Terms
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Alarm.com Holdings (Alarm.com Holdings) Business Description
Alarm.com Holdings Inc has two reportable segments: Alarm.com & Other. The Alarm.com segment represents the cloud-based Software platforms for intelligently connected property & related solutions. The other segment is focused on researching, developing & offering residential & commercial automation solutions & energy management products & services in adjacent markets. The majority of revenue is from the Alarm.com segment. The platform allows home & business owners to secure their properties and automate & control an array of connected devices. SaaS & license fees from service providers, who resell these services & pay Alarm.com a monthly subscription, are the sources of revenue for the firm. A majority of revenue is generated in the United States & Canada.
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