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.
Baxalta's Sloan Ratio for the quarter that ended in Mar. 2016 was 16.02%.
As of Mar. 2016, Baxalta has a Sloan Ratio of 16.02%, indicating there is a warning stage of accrual build up.
Baxalta Sloan Ratio % Historical Data
The historical data trend for Baxalta'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 Biotechnology subindustry, Baxalta'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.
Baxalta's Sloan Ratio % Distribution in the Biotechnology Industry
For the Biotechnology industry and Healthcare sector, Baxalta's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Baxalta's Sloan Ratio % falls into.
Baxalta 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.
Baxalta's Sloan Ratio for the fiscal year that ended in Dec. 2015 is calculated as
Baxalta's Net Income for the trailing twelve months (TTM) ended in Mar. 2016 was 280 (Jun. 2015 ) + 309 (Sep. 2015 ) + 95 (Dec. 2015 ) + 145 (Mar. 2016 ) = $829 Mil.
Baxalta's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2016 was 333 (Jun. 2015 ) + 360 (Sep. 2015 ) + 248 (Dec. 2015 ) + 128 (Mar. 2016 ) = $1,069 Mil.
Baxalta's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2016 was -293 (Jun. 2015 ) + -1123 (Sep. 2015 ) + -330 (Dec. 2015 ) + -548 (Mar. 2016 ) = $-2,294 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.
Baxalta (NYSE:BXLT) 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. 2016, Baxalta has a Sloan Ratio of 16.02%, indicating there is a warning stage of accrual build up.
Baxalta Sloan Ratio % Related Terms
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Baxalta Inc was incorporated on September 8, 2016. It is a biopharmaceutical company engaged in the field of unmet medical needs covering various diseases which includes haemophilia, immunology and oncology. The Company develops, manufactures and markets a diverse portfolio of treatments for hemophilia and other bleeding disorders, immune deficiencies, alpha-1 antitrypsin deficiency, burns and shock, and other chronic and acute medical conditions, as well as oncology treatments for acute lymphoblastic leukemia. It also invests in emerging technology platforms, including gene therapy and biosimilars. Its competitors include Advate, Feiba, Gammagard. The Company is subject to rules and regulations put forth by the jurisdiction it operates in.
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