NovoCure (NAS:NVCR) Sloan Ratio %

: 4.86% (As of Jun. 2023)

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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.

NovoCure's Sloan Ratio for the quarter that ended in Jun. 2023 was 4.86%.

As of Jun. 2023, NovoCure has a Sloan Ratio of 4.86%, indicating the company is in the safe zone and there is no funny business with accruals.

NovoCure Sloan Ratio % Historical Data

The historical data trend for NovoCure'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.

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NovoCure Annual Data

Trend

Dec13

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Sloan Ratio %

-16.54

3.72

37.41

0.33

1.40

NovoCure Quarterly Data
	Sep18	Dec18	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23
Sloan Ratio %																-5.25	32.40	1.40	-10.09	4.86

Competitive Comparison

For the Medical Devices subindustry, NovoCure'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.

Annual Data Quarterly Data

NovoCure Sloan Ratio % Distribution

For the Medical Devices & Instruments industry and Healthcare sector, NovoCure's Sloan Ratio % distribution charts can be found below:

* The bar in red indicates where NovoCure's Sloan Ratio % falls in comparison to its industry or sector. The grey bar indicates the Sloan Ratio %'s extreme value range as defined by GuruFocus.

NovoCure 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.

NovoCure's Sloan Ratio for the fiscal year that ended in Dec. 2022 is calculated as

Sloan Ratio	=	(Net Income (A: Dec. 2022 )	-	Cash Flow from Operations (A: Dec. 2022 )
	-	Cash Flow from Investing (A: Dec. 2022 ))	/	Total Assets (A: Dec. 2022 )
	=	(-92.534	-	30.788
	-	-139.957)	/	1191.648
	=	1.40%

NovoCure's Sloan Ratio for the quarter that ended in Jun. 2023 is calculated as

Sloan Ratio	=	(Net Income (TTM)	-	Cash Flow from Operations (TTM))
	-	Cash Flow from Investing (TTM))	/	Total Assets (Q: Jun. 2023 )
	=	(-174.358	-	-20.751
	-	-209.914)	/	1159.015
	=	4.86%

NovoCure's Net Income for the trailing twelve months (TTM) ended in Jun. 2023 was -26.576 (Sep. 2022 ) + -37.303 (Dec. 2022 ) + -53.061 (Mar. 2023 ) + -57.418 (Jun. 2023 ) = $-174.4 Mil.
NovoCure's Cash Flow from Operations for the trailing twelve months (TTM) ended in Jun. 2023 was 22.42 (Sep. 2022 ) + -3.707 (Dec. 2022 ) + -16.727 (Mar. 2023 ) + -22.737 (Jun. 2023 ) = $-20.8 Mil.
NovoCure's Cash Flow from Investing for the trailing twelve months (TTM) ended in Jun. 2023 was -150.244 (Sep. 2022 ) + -128.06 (Dec. 2022 ) + 82.287 (Mar. 2023 ) + -13.897 (Jun. 2023 ) = $-209.9 Mil.

NovoCure (NAS:NVCR) 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 Jun. 2023, NovoCure has a Sloan Ratio of 4.86%, indicating the company is in the safe zone and there is no funny business with accruals.

NovoCure Sloan Ratio % Related Terms

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NovoCure (NAS:NVCR) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Medical Devices & Instruments » NovoCure Ltd (NAS:NVCR) » Definitions » Sloan Ratio %

Comparable Companies

Traded in Other Exchanges

NVCR:Mexico 038:Germany

Address

Grenville Street, No. 4 The Forum, Second Floor, St. Helier, JEY, JE2 4UF

Website

https://www.novocure.com

NovoCure Ltd serves in the healthcare sector of the United States. Its business involves the development, manufacture and commercialization of Tumor Treating Fields (TTFields) devices, including Optune and Optune Lua, for the treatment of solid tumor cancers. Its pipeline consists of Ovarian Cancer, Pancreatic Cancer, Non-Small Cell Lung Cancer, and Brain Metastasis. Products are comprised of two main components: electric field generator and arrays and related accessories. NovoCure derives its major revenues in the United States.

Executives

Arye Barak Ben	officer: General Counsel	TOPAZ BUILDING, 4TH FLOOR, MATAM CENTER, PO BOX 15022, SH'AR HACARMEL, HAIFA L3 31905
Timothy J Scannell	director	2825 AIRVIEW BOULEVARD, KALAMAZOO MI 49002
Kristin Stafford	director	1550 LIBERTY RIDGE DRIVE, SUITE 115, WAYNE PA 19087
Uri Weinberg	officer: Chief Innovation Officer	NOVOCURE INC., 20 VALLEY STREAM PARKWAY, SUITE 300, MALVERN PA 19355
Frank X Leonard	officer: President, CNS Cancers US	20 VALLEY STREAM PARKWAY,, SUITE 300, MALVERN PA 19355
Ashley Cordova	officer: Chief Financial Officer	20 VALLEY STREAM PARKWAY,, SUITE 300, MALVERN PA 19355
William Patrick Burke	officer: Chief Human Resources Officer	195 COMMERCE WAY, PORTSMOUTH NH 03801
Allyson J Ocean	director	1550 LIBERTY RIDGE DRIVE, SUITE 115, WAYNE PA 19087
Ely Benaim	officer: Chief Medical Officer	C/O REXAHN PHARMACEUTICALS, INC., 15245 SHADY GROVE ROAD, SUITE 455, ROCKVILLE MD 20850
Jeryl L Hilleman	director	C/O INTERSECT ENT, INC., 1555 ADAMS DRIVE, MENLO PARK CA 94025
Pritesh Shah	officer: Chief Commercial Officer	C/O NOVOCURE INC., 20 VALLEY STREAM PARKWAY, SUITE 300, MALVERN PA 19355
Sherilyn S Mccoy	director	JOHNSON & JOHNSON, ONE JOHNSON & JOHNSON PLAZA, NEW BRUNSWICK NJ 08933
David Hung	director	C/O AXOVANT SCIENCES, INC., 320 WEST 37TH STREET, 5TH FLOOR, NEW YORK NY 10018
Martin J. Madden	director	C/O MICROBOT MEDICAL INC., 175 DERBY STREET 27/1, HINGHAM MA 02043
Pomona Secondary Associates Vii Llc	10 percent owner	780 THIRD AVENUE, 46TH FLOOR, NEW YORK NY 10017