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.
Avalara's Sloan Ratio for the quarter that ended in Jun. 2022 was -3.58%.
As of Jun. 2022, Avalara has a Sloan Ratio of -3.58%, indicating the company is in the safe zone and there is no funny business with accruals.
Avalara Sloan Ratio % Historical Data
The historical data trend for Avalara'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.
Avalara Annual Data
Trend
Dec15
Dec16
Dec17
Dec18
Dec19
Dec20
Dec21
Sloan Ratio %
-24.79
-16.15
-4.15
17.48
-2.57
Avalara Quarterly Data
Sep17
Dec17
Mar18
Jun18
Sep18
Dec18
Mar19
Jun19
Sep19
Dec19
Mar20
Jun20
Sep20
Dec20
Mar21
Jun21
Sep21
Dec21
Mar22
Jun22
Sloan Ratio %
15.54
10.26
-2.70
-2.93
-3.58
Competitive Comparison
For the Software - Application subindustry, Avalara'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.
Avalara Sloan Ratio % Distribution
For the Software industry and Technology sector, Avalara's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Avalara's Sloan Ratio % falls in comparison to its industry or sector. The grey bar indicates the Sloan Ratio %'s extreme value range as defined by GuruFocus.
Avalara 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.
Avalara's Sloan Ratio for the fiscal year that ended in Dec. 2021 is calculated as
Avalara's Net Income for the trailing twelve months (TTM) ended in Jun. 2022 was -32.546 (Sep. 2021 ) + -45.434 (Dec. 2021 ) + -32.557 (Mar. 2022 ) + -55.848 (Jun. 2022 ) = $-166.4 Mil.
Avalara's Cash Flow from Operations for the trailing twelve months (TTM) ended in Jun. 2022 was 11.422 (Sep. 2021 ) + 25.393 (Dec. 2021 ) + -23.066 (Mar. 2022 ) + 6.204 (Jun. 2022 ) = $20.0 Mil.
Avalara's Cash Flow from Investing for the trailing twelve months (TTM) ended in Jun. 2022 was -14.975 (Sep. 2021 ) + -50.843 (Dec. 2021 ) + -8.053 (Mar. 2022 ) + -17.876 (Jun. 2022 ) = $-91.7 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.
Avalara (NYSE:AVLR) 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 Jun. 2022, Avalara has a Sloan Ratio of -3.58%, indicating the company is in the safe zone and there is no funny business with accruals.
Avalara Sloan Ratio % Related Terms
Thank you for viewing the detailed overview of Avalara's Sloan Ratio % provided by GuruFocus.com. Please click on the following links to see related term pages.
Avalara Inc provides compliance solutions. It provides software solutions that help businesses of all types and sizes comply with tax requirements for transactions worldwide. The company offers a broad and growing suite of compliance solutions for transaction taxes, such as sales and use tax, VAT, fuel excise tax, beverage alcohol, cross-border taxes, lodging tax, and communications tax. These solutions enable customers to automate the process of determining taxability, identifying applicable tax rates, determining and collecting taxes, preparing and filing returns, remitting taxes, maintaining tax records, and managing compliance documents. It generates revenue in the form of subscriptions and professional services.
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