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.
Roper Technologies's Sloan Ratio for the quarter that ended in Dec. 2023 was 5.24%.
As of Dec. 2023, Roper Technologies has a Sloan Ratio of 5.24%, indicating the company is in the safe zone and there is no funny business with accruals.
Roper Technologies Sloan Ratio % Historical Data
The historical data trend for Roper Technologies'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 Roper Technologies's Sloan Ratio %
For the Software - Application subindustry, Roper Technologies'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.
Roper Technologies's Sloan Ratio % Distribution in the Software Industry
For the Software industry and Technology sector, Roper Technologies's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Roper Technologies's Sloan Ratio % falls into.
Roper Technologies 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.
Roper Technologies's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Roper Technologies's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was 283.1 (Mar. 2023 ) + 364.9 (Jun. 2023 ) + 347.2 (Sep. 2023 ) + 389 (Dec. 2023 ) = $1,384 Mil.
Roper Technologies's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was 463.7 (Mar. 2023 ) + 319.6 (Jun. 2023 ) + 630 (Sep. 2023 ) + 621.8 (Dec. 2023 ) = $2,035 Mil.
Roper Technologies's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -26.8 (Mar. 2023 ) + -23.5 (Jun. 2023 ) + -1958.4 (Sep. 2023 ) + -117.6 (Dec. 2023 ) = $-2,126 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.
Roper Technologies (NAS:ROP) 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, Roper Technologies has a Sloan Ratio of 5.24%, indicating the company is in the safe zone and there is no funny business with accruals.
Roper Technologies Sloan Ratio % Related Terms
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Roper Technologies (Roper Technologies) Business Description
Roper is a diversified technology company that operates through three segments: application software; network software and systems; and technology enabled products. The firm's culture emphasizes acquiring asset-light, cash-generative businesses. Roper then reinvests this excess cash in businesses that yield incrementally higher rates of return. While the businesses are managed in a decentralized manner, Roper does not passively manage its portfolio. Instead, Roper manages its businesses through the Socratic method and empowers decision-makers through group executive coaching. Roper has now rotated a clear majority of its business from legacy industrial products into technology software in mature, niche markets with large quantities of deferred revenue.
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