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.
Elevance Health's Sloan Ratio for the quarter that ended in Mar. 2024 was 6.59%.
As of Mar. 2024, Elevance Health has a Sloan Ratio of 6.59%, indicating the company is in the safe zone and there is no funny business with accruals.
Elevance Health Sloan Ratio % Historical Data
The historical data trend for Elevance Health'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 Elevance Health's Sloan Ratio %
For the Healthcare Plans subindustry, Elevance Health'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.
Elevance Health's Sloan Ratio % Distribution in the Healthcare Plans Industry
For the Healthcare Plans industry and Healthcare sector, Elevance Health's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Elevance Health's Sloan Ratio % falls into.
Elevance Health 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.
Elevance Health's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Elevance Health's Net Income for the trailing twelve months (TTM) ended in Mar. 2024 was 1853 (Jun. 2023 ) + 1289 (Sep. 2023 ) + 856 (Dec. 2023 ) + 2246 (Mar. 2024 ) = $6,244 Mil.
Elevance Health's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2024 was 1950 (Jun. 2023 ) + 2613 (Sep. 2023 ) + -2971 (Dec. 2023 ) + 1978 (Mar. 2024 ) = $3,570 Mil.
Elevance Health's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2024 was -672 (Jun. 2023 ) + -687 (Sep. 2023 ) + -1029 (Dec. 2023 ) + -2310 (Mar. 2024 ) = $-4,698 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.
Elevance Health (NYSE:ELV) 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 Mar. 2024, Elevance Health has a Sloan Ratio of 6.59%, indicating the company is in the safe zone and there is no funny business with accruals.
Elevance Health Sloan Ratio % Related Terms
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Elevance Health (Elevance Health) Business Description
Elevance Health remains one of the leading health insurers in the U.S., providing medical benefits to 48 million medical members as of June 2023. The company offers employer, individual, and government-sponsored coverage plans. Elevance differs from its peers in its unique position as the largest single provider of Blue Cross Blue Shield branded coverage, operating as the licensee for the Blue Cross Blue Shield Association in 14 states. Through acquisitions, such as the Amerigroup deal in 2012 and MMM in 2021, Elevance's reach expands beyond those states through government-sponsored programs such as Medicaid and Medicare Advantage plans, too.
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