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.
Globus Medical's Sloan Ratio for the quarter that ended in Dec. 2023 was -8.33%.
As of Dec. 2023, Globus Medical has a Sloan Ratio of -8.33%, indicating the company is in the safe zone and there is no funny business with accruals.
Globus Medical Sloan Ratio % Historical Data
The historical data trend for Globus Medical'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 Globus Medical's Sloan Ratio %
For the Medical Devices subindustry, Globus Medical'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.
Globus Medical's Sloan Ratio % Distribution in the Medical Devices & Instruments Industry
For the Medical Devices & Instruments industry and Healthcare sector, Globus Medical's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Globus Medical's Sloan Ratio % falls into.
Globus Medical 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.
Globus Medical's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Globus Medical's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was 49.129 (Mar. 2023 ) + 57.712 (Jun. 2023 ) + 0.998 (Sep. 2023 ) + 15.034 (Dec. 2023 ) = $123 Mil.
Globus Medical's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was 53.313 (Mar. 2023 ) + 35.028 (Jun. 2023 ) + 50.484 (Sep. 2023 ) + 104.674 (Dec. 2023 ) = $243 Mil.
Globus Medical's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was 10.992 (Mar. 2023 ) + 52.222 (Jun. 2023 ) + -80.861 (Sep. 2023 ) + 320.615 (Dec. 2023 ) = $303 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.
Globus Medical (NYSE:GMED) 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, Globus Medical has a Sloan Ratio of -8.33%, indicating the company is in the safe zone and there is no funny business with accruals.
Globus Medical Sloan Ratio % Related Terms
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Globus Medical (Globus Medical) Business Description
Globus Medical Inc is a medical device company that develops and provides healthcare products and solutions to hospitals, physicians, and surgical centers. The firm's products are organized into two categories: musculoskeletal solutions, which include medical devices and instruments used mostly for spinal and orthopedic procedures, and enabling technologies, which include advanced computer systems developed for enhancing surgical capabilities. The vast majority of the company's revenue is generated from musculoskeletal solutions products, and more than half of the revenue is earned in the United States.
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