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.
As of Dec. 2023, Fresenius Medical Care AG has a Sloan Ratio of -4.63%, indicating the company is in the safe zone and there is no funny business with accruals.
Fresenius Medical Care AG Sloan Ratio % Historical Data
* 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 Fresenius Medical Care AG's Sloan Ratio %
For the Medical Care Facilities subindustry, Fresenius Medical Care AG'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.
Fresenius Medical Care AG's Sloan Ratio % Distribution in the Healthcare Providers & Services Industry
For the Healthcare Providers & Services industry and Healthcare sector, Fresenius Medical Care AG's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Fresenius Medical Care AG's Sloan Ratio % falls into.
Fresenius Medical Care AG 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.
Fresenius Medical Care AG's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Fresenius Medical Care AG's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was 92.465 (Mar. 2023 ) + 152.068 (Jun. 2023 ) + 90.022 (Sep. 2023 ) + 204.935 (Dec. 2023 ) = $539 Mil.
Fresenius Medical Care AG's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was 152.928 (Mar. 2023 ) + 1091.164 (Jun. 2023 ) + 810.839 (Sep. 2023 ) + 784.15 (Dec. 2023 ) = $2,839 Mil.
Fresenius Medical Care AG's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -174.815 (Mar. 2023 ) + -144.469 (Jun. 2023 ) + -161.264 (Sep. 2023 ) + -105.236 (Dec. 2023 ) = $-586 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.
Fresenius Medical Care AG (NYSE:FMS) 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, Fresenius Medical Care AG has a Sloan Ratio of -4.63%, indicating the company is in the safe zone and there is no funny business with accruals.
Fresenius Medical Care AG Sloan Ratio % Related Terms
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Fresenius Medical Care AG (Fresenius Medical Care AG) Business Description
Fresenius Medical Care is the largest dialysis company in the world, treating about 345,000 patients from over 4,100 clinics across the globe as of December 2022. In addition to providing dialysis services, the firm is a leading supplier of dialysis products, including machines, dialyzers, and concentrates. Fresenius accounts for about 35% of the global dialysis products market and benefits from being the world's only fully integrated dialysis business. Services account for roughly 80% of firmwide revenue, including care coordination and ancillary operations, while products account for the other roughly 20%. Products typically enjoy a higher margin, making them a strong contributor to the bottom line.
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