Switch to:
Quality Systems Inc  (NAS:QSII) Sloan Ratio %: -6.49% (As of Jun. 2017)

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.

Quality Systems Inc's Sloan Ratio for the quarter that ended in Jun. 2017 was -6.49%.

As of Jun. 2017, Quality Systems Inc has a Sloan Ratio of -6.49%, indicating the company is in the safe zone and there is no funny business with accruals.


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

Quality Systems Inc Annual Data

Mar08 Mar09 Mar10 Mar11 Mar12 Mar13 Mar14 Mar15 Mar16 Mar17
Sloan Ratio % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 6.39 -5.47 -6.71 29.25 -17.11

Quality Systems Inc Quarterly Data

Sep12 Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17
Sloan Ratio % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 25.49 18.61 16.48 -17.11 -6.49

Competitive Comparison
* 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.


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.

Quality Systems Inc's Sloan Ratio for the fiscal year that ended in Mar. 2017 is calculated as

Sloan Ratio=(Net Income (A: )-Cash Flow from Operations (A: Mar. 2017 )
-Cash Flow from Investing (A: Mar. 2017 ))/Total Assets (A: Mar. 2017 )
=(18.241-110.592
--11.405)/473.221
=-17.11%

Quality Systems Inc's Sloan Ratio for the quarter that ended in Jun. 2017 is calculated as

Sloan Ratio=(Net Income (TTM)-Cash Flow from Operations (TTM})
-Cash Flow from Investing (TTM))/Total Assets (Q: Jun. 2017 )
=(22.784-110.453
--55.861)/489.909
=-6.49%

Quality Systems Inc's Net Income for the trailing twelve months (TTM) ended in Jun. 2017 was 3.987 (Sep. 2016 ) + 10.486 (Dec. 2016 ) + 4.415 (Mar. 20 ) + 3.896 (Jun. 2017 ) = $22.8 Mil.
Quality Systems Inc's Cash Flow from Operations for the trailing twelve months (TTM) ended in Jun. 2017 was 43.452 (Sep. 2016 ) + 25.038 (Dec. 2016 ) + 29.169 (Mar. 20 ) + 12.794 (Jun. 2017 ) = $110.5 Mil.
{{stock_data.stock.company}'s Cash Flow from Investing for the trailing twelve months (TTM) ended in Jun. 2017 was -3.898 (Sep. 2016 ) + -4.587 (Dec. 2016 ) + -5.801 (Mar. 20 ) + -41.575 (Jun. 2017 ) = $-55.9 Mil.

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.


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. 2017, Quality Systems Inc has a Sloan Ratio of -6.49%, indicating the company is in the safe zone and there is no funny business with accruals.


Related Terms


Headlines

No Headline

Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GF Chat

{{numOfNotice}}
FEEDBACK