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.
Polycom's Sloan Ratio for the quarter that ended in Jun. 2016 was -9.25%.
As of Jun. 2016, Polycom has a Sloan Ratio of -9.25%, indicating the company is in the safe zone and there is no funny business with accruals.
Polycom Sloan Ratio % Historical Data
The historical data trend for Polycom'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 Communication Equipment subindustry, Polycom'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.
Polycom's Sloan Ratio % Distribution in the Hardware Industry
For the Hardware industry and Technology sector, Polycom's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Polycom's Sloan Ratio % falls into.
Polycom 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.
Polycom's Sloan Ratio for the fiscal year that ended in Dec. 2015 is calculated as
Polycom's Net Income for the trailing twelve months (TTM) ended in Jun. 2016 was 13.573 (Sep. 2015 ) + 15.557 (Dec. 2015 ) + 3.335 (Mar. 2016 ) + -9.997 (Jun. 2016 ) = $22 Mil.
Polycom's Cash Flow from Operations for the trailing twelve months (TTM) ended in Jun. 2016 was 25.897 (Sep. 2015 ) + 30.504 (Dec. 2015 ) + 52.893 (Mar. 2016 ) + 19.373 (Jun. 2016 ) = $129 Mil.
Polycom's Cash Flow from Investing for the trailing twelve months (TTM) ended in Jun. 2016 was -7.491 (Sep. 2015 ) + -3.416 (Dec. 2015 ) + 10.658 (Mar. 2016 ) + 59.802 (Jun. 2016 ) = $60 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.
Polycom (NAS:PLCM) 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 Jun. 2016, Polycom has a Sloan Ratio of -9.25%, indicating the company is in the safe zone and there is no funny business with accruals.
Polycom Sloan Ratio % Related Terms
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Polycom Inc was incorporated in December 1990 in Delaware. The Company provides an open, standards-based unified communications and collaboration (UC&C) solutions for voice, video and content collaboration solutions. Its solutions are powered by the Polycom RealPresence Platform, comprehensive software infrastructure and rich application programming interfaces (APIs) that interoperate with a set of communication, business, mobile, and cloud applications and devices to deliver secure face-to-face video collaboration across different environments. The Company is engaged in helping organizations achieve new levels of teamwork, efficiency and productivity by unleashing the power of human collaboration. The Company sells its solutions through a high-touch sales model that leverages its network of channel partners, including distributors, value-added resellers, system integrators; communications services providers, and retailers. The Company serves in three geographical segments; Americas, EMEA and APAC. Its products and solutions are; UC Group Systems, which includes immersive telepresence, group video and group voice systems. UC Platform, which includes collaboration servers, virtualization management "distributed media optimization", resource management, recording and streaming, open API's and remote access technologies that constitute the RealPresence Platform, and UC Personal Devices, which includes desktop video devices and desktop voice products. It competes in the UC&C market with products and solutions that enable voice, video and content collaboration on-premises, across intranets, extranets, mobile devices, and the Internet via its customer premises-based RealPresence Platform, web-based social-collaboration business platforms, and video collaboration-as-a-service offerings delivered from the cloud. These competitors include but are not limited to Cisco Systems, Inc., Acano, Avaya Inc., Blue Jeans Networks, Inc., ClearOne Communications, Inc., Huawei Technologies Co., Ltd., Logitech International S.A./LifeSize, PexIP, Snom Technology Ag, Vidyo, Inc., Yamaha Corporation/Revolabs, Inc., Yealink, ZTE Corporation and others. Its products and services are subject to various federal, state, local, and foreign laws and regulations.
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