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.
Walgreens Boots Alliance's Sloan Ratio for the quarter that ended in Feb. 2024 was -8.94%.
As of Feb. 2024, Walgreens Boots Alliance has a Sloan Ratio of -8.94%, indicating the company is in the safe zone and there is no funny business with accruals.
Walgreens Boots Alliance Sloan Ratio % Historical Data
The historical data trend for Walgreens Boots Alliance'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 Pharmaceutical Retailers subindustry, Walgreens Boots Alliance'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.
Walgreens Boots Alliance Sloan Ratio % Distribution
For the Healthcare Providers & Services industry and Healthcare sector, Walgreens Boots Alliance's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Walgreens Boots Alliance's Sloan Ratio % falls into.
Walgreens Boots Alliance 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.
Walgreens Boots Alliance's Sloan Ratio for the fiscal year that ended in Aug. 2023 is calculated as
Walgreens Boots Alliance's Net Income for the trailing twelve months (TTM) ended in Feb. 2024 was 118 (May. 2023 ) + -180 (Aug. 2023 ) + -67 (Nov. 2023 ) + -5908 (Feb. 2024 ) = $-6,037 Mil.
Walgreens Boots Alliance's Cash Flow from Operations for the trailing twelve months (TTM) ended in Feb. 2024 was -20 (May. 2023 ) + 1039 (Aug. 2023 ) + -281 (Nov. 2023 ) + -637 (Feb. 2024 ) = $101 Mil.
Walgreens Boots Alliance's Cash Flow from Investing for the trailing twelve months (TTM) ended in Feb. 2024 was 334 (May. 2023 ) + 155 (Aug. 2023 ) + 85 (Nov. 2023 ) + 817 (Feb. 2024 ) = $1,391 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.
Walgreens Boots Alliance (NAS:WBA) 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 Feb. 2024, Walgreens Boots Alliance has a Sloan Ratio of -8.94%, indicating the company is in the safe zone and there is no funny business with accruals.
Walgreens Boots Alliance Sloan Ratio % Related Terms
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Walgreens Boots Alliance (Walgreens Boots Alliance) Business Description
Walgreens Boots Alliance is one of the largest retail pharmacy chains in the U.S., with over 8,500 locations. Nearly three quarters of Americans live within five miles of a Walgreens location. Roughly two thirds of revenue is generated from prescription drug sales; Walgreens makes up 20% of total prescription revenue in the U.S. Walgreens also generates sales from retail products (general wellness consumables and its own branded merchandise), European drug wholesale, and healthcare. With more locations incorporating additional services like Health Corner and Village Medical, Walgreens creates an omnichannel experience for patients and positions itself as a one-stop healthcare provider.
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