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.
Innovent Biologics's Sloan Ratio for the quarter that ended in Jun. 2023 was 8.34%.
As of Jun. 2023, Innovent Biologics has a Sloan Ratio of 8.34%, indicating the company is in the safe zone and there is no funny business with accruals.
Innovent Biologics Sloan Ratio % Historical Data
The historical data trend for Innovent Biologics'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 Innovent Biologics's Sloan Ratio %
For the Biotechnology subindustry, Innovent Biologics'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.
Innovent Biologics's Sloan Ratio % Distribution in the Biotechnology Industry
For the Biotechnology industry and Healthcare sector, Innovent Biologics's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Innovent Biologics's Sloan Ratio % falls into.
Innovent Biologics 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.
Innovent Biologics's Sloan Ratio for the fiscal year that ended in Dec. 2022 is calculated as
For company reported semi-annually, GuruFocus uses latest two semi-annual data as the TTM data.
Innovent Biologics's Net Income for the trailing twelve months (TTM) ended in Jun. 2023 was -1372.221 (Dec. 2022 ) + -152.198 (Jun. 2023 ) = HK$-1,524 Mil.
Innovent Biologics's Cash Flow from Operations for the trailing twelve months (TTM) ended in Jun. 2023 was -1241.904 (Dec. 2022 ) + -681.306 (Jun. 2023 ) = HK$-1,923 Mil.
Innovent Biologics's Cash Flow from Investing for the trailing twelve months (TTM) ended in Jun. 2023 was -2026.389 (Dec. 2022 ) + 793.035 (Jun. 2023 ) = HK$-1,233 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.
Innovent Biologics (HKSE:01801) 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. 2023, Innovent Biologics has a Sloan Ratio of 8.34%, indicating the company is in the safe zone and there is no funny business with accruals.
Innovent Biologics Sloan Ratio % Related Terms
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Innovent Biologics (HKSE:01801) Business Description
Innovent Biologics, or Innovent, is one of the leading biotechnology companies in China. Listed on the Hong Kong Exchange in 2018, Innovent has eight commercialized oncology products and two commercialized non-oncology products as of August 2023. Its core asset is Tyvyt, a PD-1 inhibitor included in the National Reimbursement Drug Lists for the first-line treatment of five major cancers. Innovent has over 30 strategic collaborations with global pharmaceutical or biotech companies, such as Eli Lilly, Roche Group, Incyte, and others. It also has a wide spectrum of therapeutic targets in early clinical developments. Among its upcoming pipelines, the potential blockbuster is Mazdutide, a therapy for obesity and type 2 diabetes.
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