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.
Workday's Sloan Ratio for the quarter that ended in Apr. 2023 was -0.08%.
As of Apr. 2023, Workday has a Sloan Ratio of -0.08%, indicating the company is in the safe zone and there is no funny business with accruals.
Workday Sloan Ratio % Historical Data
The historical data trend for Workday'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.
* Premium members only.
Workday Annual Data
Trend
Jan14
Jan15
Jan16
Jan17
Jan18
Jan19
Jan20
Jan21
Jan22
Jan23
Sloan Ratio %
-3.30
-6.58
-3.55
-0.13
3.57
Workday Quarterly Data
Jul18
Oct18
Jan19
Apr19
Jul19
Oct19
Jan20
Apr20
Jul20
Oct20
Jan21
Apr21
Jul21
Oct21
Jan22
Apr22
Jul22
Oct22
Jan23
Apr23
Sloan Ratio %
4.31
6.14
5.43
3.57
-0.08
Competitive Comparison
For the Software - Application subindustry, Workday'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.
Workday Sloan Ratio % Distribution
For the Software industry and Technology sector, Workday's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Workday's Sloan Ratio % falls in comparison to its industry or sector. The grey bar indicates the Sloan Ratio %'s extreme value range as defined by GuruFocus.
Workday 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.
Workday's Sloan Ratio for the fiscal year that ended in Jan. 2023 is calculated as
Workday's Net Income for the trailing twelve months (TTM) ended in Apr. 2023 was -64.158 (Jul. 2022 ) + -74.721 (Oct. 2022 ) + -125.697 (Jan. 2023 ) + 0.136 (Apr. 2023 ) = $-264 Mil.
Workday's Cash Flow from Operations for the trailing twelve months (TTM) ended in Apr. 2023 was 114.358 (Jul. 2022 ) + 408.668 (Oct. 2022 ) + 694.452 (Jan. 2023 ) + 277.316 (Apr. 2023 ) = $1,495 Mil.
Workday's Cash Flow from Investing for the trailing twelve months (TTM) ended in Apr. 2023 was -486.995 (Jul. 2022 ) + -168.063 (Oct. 2022 ) + -380.127 (Jan. 2023 ) + -712.976 (Apr. 2023 ) = $-1,748 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.
Workday (NAS:WDAY) 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 Apr. 2023, Workday has a Sloan Ratio of -0.08%, indicating the company is in the safe zone and there is no funny business with accruals.
Workday Sloan Ratio % Related Terms
Thank you for viewing the detailed overview of Workday's Sloan Ratio % provided by GuruFocus.com. Please click on the following links to see related term pages.
Workday is a software company that offers human capital management, or HCM, financial management, and business planning solutions. Known for being a cloud-only software provider, Workday is headquartered in Pleasanton, California. Founded in 2005, Workday now employs over 12,000 employees.
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