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.
Cara Therapeutics's Sloan Ratio for the quarter that ended in Dec. 2023 was -55.54%.
Warning Sign:
When sloan ratio (-55.54)% higher than 25% or lower than -25%, earnings are more likely to be made up of accruals.
As of Dec. 2023, Cara Therapeutics has a Sloan Ratio of -55.54%, indicating earnings are more likely to be made up of accruals.
Cara Therapeutics Sloan Ratio % Historical Data
The historical data trend for Cara Therapeutics'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 Cara Therapeutics's Sloan Ratio %
For the Biotechnology subindustry, Cara Therapeutics'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.
Cara Therapeutics's Sloan Ratio % Distribution in the Biotechnology Industry
For the Biotechnology industry and Healthcare sector, Cara Therapeutics's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Cara Therapeutics's Sloan Ratio % falls into.
Cara Therapeutics 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.
Cara Therapeutics's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Cara Therapeutics's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was -26.665 (Mar. 2023 ) + -31.479 (Jun. 2023 ) + -28.032 (Sep. 2023 ) + -32.337 (Dec. 2023 ) = $-118.51 Mil.
Cara Therapeutics's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was -34.618 (Mar. 2023 ) + -20.445 (Jun. 2023 ) + -19.645 (Sep. 2023 ) + -17.37 (Dec. 2023 ) = $-92.08 Mil.
Cara Therapeutics's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was 17.708 (Mar. 2023 ) + 32.803 (Jun. 2023 ) + 23.155 (Sep. 2023 ) + -30.205 (Dec. 2023 ) = $43.46 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.
Cara Therapeutics (NAS:CARA) 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, Cara Therapeutics has a Sloan Ratio of -55.54%, indicating earnings are more likely to be made up of accruals.
Cara Therapeutics Sloan Ratio % Related Terms
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Cara Therapeutics (Cara Therapeutics) Business Description
Cara Therapeutics Inc is an emerging biotechnology company involved in the development of novel therapeutics to treat human diseases associated with inflammation, pain, and pruritus. Cara's most advanced compound, CR845, aims to treat acute pain and pruritus. This patented compound has analgesic, anti-inflammatory, and antipruritic properties that can be used for multiple therapeutic applications. Additionally, Cara's objective is to use its proprietary drug-screening technology to develop a future pipeline of first-in-class molecules with analgesic and anti-inflammatory features.
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