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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.
Morphic Holding's Sloan Ratio for the quarter that ended in Dec. 2023 was 41.80%.
Warning Sign:
When sloan ratio (41.8)% higher than 25% or lower than -25%, earnings are more likely to be made up of accruals.
As of Dec. 2023, Morphic Holding has a Sloan Ratio of 41.80%, indicating earnings are more likely to be made up of accruals.
The historical data trend for Morphic Holding'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.
For the Biotechnology subindustry, Morphic Holding'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.
For the Biotechnology industry and Healthcare sector, Morphic Holding's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Morphic Holding's Sloan Ratio % falls into.
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.
Morphic Holding's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Sloan Ratio | = | (Net Income (A: Dec. 2023 ) | - | Cash Flow from Operations (A: Dec. 2023 ) |
- | Cash Flow from Investing (A: Dec. 2023 )) | / | Total Assets (A: Dec. 2023 ) | |
= | (-152.095 | - | -112.312 | |
- | -341.815) | / | 722.514 | |
= | 41.80% |
Morphic Holding's Sloan Ratio for the quarter that ended in Dec. 2023 is calculated as
Sloan Ratio | = | (Net Income (TTM) | - | Cash Flow from Operations (TTM)) |
- | Cash Flow from Investing (TTM)) | / | Total Assets (Q: Dec. 2023 ) | |
= | (-152.095 | - | -112.312 | |
- | -341.815) | / | 722.514 | |
= | 41.80% |
Morphic Holding's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was -36.135 (Mar. 2023 ) + -39.013 (Jun. 2023 ) + -36.212 (Sep. 2023 ) + -40.735 (Dec. 2023 ) = $-152.10 Mil. Morphic Holding's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was -31.454 (Mar. 2023 ) + -23.034 (Jun. 2023 ) + -29.25 (Sep. 2023 ) + -28.574 (Dec. 2023 ) = $-112.31 Mil. Morphic Holding's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -88.401 (Mar. 2023 ) + -133.217 (Jun. 2023 ) + -133.082 (Sep. 2023 ) + 12.885 (Dec. 2023 ) = $-341.82 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.
Morphic Holding (NAS:MORF) 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.
According to How to Beat the Market with the Sloan Ratio:
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, Morphic Holding has a Sloan Ratio of 41.80%, indicating earnings are more likely to be made up of accruals.
Thank you for viewing the detailed overview of Morphic Holding's Sloan Ratio % provided by GuruFocus.com. Please click on the following links to see related term pages.
William Devaul | officer: General Counsel and Secretary | C/O MORPHIC HOLDING, INC., 35 GATEHOUSE DRIVE, A2, WALTHAM MA 02451 |
Bruce Rogers | officer: Chief Scientific Officer | C/O MORPHIC HOLDING, INC., 35 GATEHOUSE DRIVE, A2, WALTHAM MA 02451 |
Marc Schegerin | officer: CFO and COO | ARQULE INC, 1 WALL ST FL6, BURLINGTON MA 01803 |
Praveen P. Tipirneni | director, officer: President and CEO | C/O MORPHIC HOLDING, INC.,, 35 GATEHOUSE DRIVE, A2, WALTHAM MA 02451 |
Farrell Robert E Jr | officer: VP Finance and Ops, Secretary | CAMBRIDGE DISCOVERY PARK, 100 ACORN PARK DRIVE, 5TH FLOOR, CAMBRIDGE MA 02140 |
Joseph P Slattery | director | C/O TRANSENTERIX, INC., 635 DAVIS DRIVE, SUITE 300, MORRISVILLE NC 27560 |
Martin Edwards | director | 15 NEW ENGLAND EXECUTIVE PARK, BURLINGTON MA 01803 |
Timothy A Springer | director, 10 percent owner | 36 WOODMAN ROAD, CHESTNUT HILL MA 02467 |
Peter Linde | officer: Chief Medical Officer | C/O MORPHIC HOLDING, INC., 35 GATEHOUSE DRIVE A2, WALTHAM ME 02451 |
Nisha Nanda | director | 281 TRESSER BOULEVARD, STAMFORD CT 06901 |
Amir Nashat | director | 10835 ROAD TO THE CURE, SUITE 205, SAN DIEGO CA 92121 |
Omega Fund V Gp, L.p. | director | 888 BOYLSTON ST., SUITE 1111, BOSTON MA 02199 |
Susannah Gray | director | 10770 WATERIDGE CIRCLE SUITE 200, SAN DIEGO CA 92121 |
Vikas Goyal | director | C/O SR ONE, LTD., 161 WASHINGTON ST., SUITE 500, EIGHT TOWER BRIDGE, CONSHOHOCKEN PA 19428 |
Otello Stampacchia | director | 888 BOYLSTON ST., SUITE 1111, BOSTON MA 02199 |
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