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.
Fortress Biotech's Sloan Ratio for the quarter that ended in Dec. 2023 was 41.60%.
Warning Sign:
When sloan ratio (41.6)% higher than 25% or lower than -25%, earnings are more likely to be made up of accruals.
As of Dec. 2023, Fortress Biotech has a Sloan Ratio of 41.60%, indicating earnings are more likely to be made up of accruals.
Fortress Biotech Sloan Ratio % Historical Data
The historical data trend for Fortress Biotech'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 Fortress Biotech's Sloan Ratio %
For the Biotechnology subindustry, Fortress Biotech'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.
Fortress Biotech's Sloan Ratio % Distribution in the Biotechnology Industry
For the Biotechnology industry and Healthcare sector, Fortress Biotech's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Fortress Biotech's Sloan Ratio % falls into.
Fortress Biotech 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.
Fortress Biotech's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Fortress Biotech's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was -21.537 (Mar. 2023 ) + -24.776 (Jun. 2023 ) + -5.045 (Sep. 2023 ) + -9.279 (Dec. 2023 ) = $-60.64 Mil.
Fortress Biotech's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was -43.22 (Mar. 2023 ) + -33.291 (Jun. 2023 ) + -16.779 (Sep. 2023 ) + -34.935 (Dec. 2023 ) = $-128.23 Mil.
Fortress Biotech's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -5 (Mar. 2023 ) + -2.039 (Jun. 2023 ) + 4.999 (Sep. 2023 ) + -0.063 (Dec. 2023 ) = $-2.10 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.
Fortress Biotech (NAS:FBIO) 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, Fortress Biotech has a Sloan Ratio of 41.60%, indicating earnings are more likely to be made up of accruals.
Fortress Biotech Sloan Ratio % Related Terms
Thank you for viewing the detailed overview of Fortress Biotech's Sloan Ratio % provided by GuruFocus.com. Please click on the following links to see related term pages.
Fortress Biotech (Fortress Biotech) Business Description
Fortress Biotech Inc is a biopharmaceutical company. The firm is involved in the business of acquiring, developing, and commercializing pharmaceutical and biotechnology products. Its product portfolio encompasses Qbrexza, Accutane, Amzeeq, Zilxi, Targadox, Ximino, and Exelderm. The business activities of the group are functioned through Dermatology Product Sales, and Pharmaceutical and Biotechnology Product Development. It derives the majority of its revenues from Dermatology segment. Its subsidiaries also operate in biotechnology, pharmaceutical, oncology, therapeutics sectors.
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