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.
MarketAxess Holdings's Sloan Ratio for the quarter that ended in Dec. 2023 was 3.95%.
As of Dec. 2023, MarketAxess Holdings has a Sloan Ratio of 3.95%, indicating the company is in the safe zone and there is no funny business with accruals.
MarketAxess Holdings Sloan Ratio % Historical Data
The historical data trend for MarketAxess Holdings'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 MarketAxess Holdings's Sloan Ratio %
For the Capital Markets subindustry, MarketAxess Holdings'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.
MarketAxess Holdings's Sloan Ratio % Distribution in the Capital Markets Industry
For the Capital Markets industry and Financial Services sector, MarketAxess Holdings's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where MarketAxess Holdings's Sloan Ratio % falls into.
MarketAxess Holdings 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.
MarketAxess Holdings's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
MarketAxess Holdings's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was 73.628 (Mar. 2023 ) + 59.859 (Jun. 2023 ) + 54.941 (Sep. 2023 ) + 69.627 (Dec. 2023 ) = $258.1 Mil.
MarketAxess Holdings's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was 7.527 (Mar. 2023 ) + 105.394 (Jun. 2023 ) + 79.161 (Sep. 2023 ) + 141.685 (Dec. 2023 ) = $333.8 Mil.
MarketAxess Holdings's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -32.754 (Mar. 2023 ) + -15.013 (Jun. 2023 ) + -15.85 (Sep. 2023 ) + -91.673 (Dec. 2023 ) = $-155.3 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.
MarketAxess Holdings (NAS:MKTX) 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, MarketAxess Holdings has a Sloan Ratio of 3.95%, indicating the company is in the safe zone and there is no funny business with accruals.
MarketAxess Holdings Sloan Ratio % Related Terms
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MarketAxess Holdings (MarketAxess Holdings) Business Description
Founded in 2000, MarketAxess is a leading electronic fixed-income trading platform that connects broker/dealers and institutional investors. The company is primarily focused on credit based fixed income securities with its main trading products being U.S. investment-grade and high-yield bonds, Eurobonds, and Emerging Market corporate debt. Recently the company has expanded more aggressively into Treasuries and municipal bonds with the acquisitions of LiquidityEdge and MuniBrokers in 2019 and 2021, respectively. The company also provides pre- and post-trade services with its acquisition of Regulatory Reporting Hub from Deutsche Börse Group in 2020 adding to its product offerings.
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