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.
* 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 Longboard Pharmaceuticals's Sloan Ratio %
For the Biotechnology subindustry, Longboard Pharmaceuticals'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.
Longboard Pharmaceuticals's Sloan Ratio % Distribution in the Biotechnology Industry
For the Biotechnology industry and Healthcare sector, Longboard Pharmaceuticals's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Longboard Pharmaceuticals's Sloan Ratio % falls into.
Longboard Pharmaceuticals 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.
Longboard Pharmaceuticals's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Longboard Pharmaceuticals's Net Income for the trailing twelve months (TTM) ended in Mar. 2024 was -14.999 (Jun. 2023 ) + -12.934 (Sep. 2023 ) + -15.033 (Dec. 2023 ) + -14.986 (Mar. 2024 ) = $-57.95 Mil.
Longboard Pharmaceuticals's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2024 was -13.454 (Jun. 2023 ) + -13.289 (Sep. 2023 ) + -11.028 (Dec. 2023 ) + -15.177 (Mar. 2024 ) = $-52.95 Mil.
Longboard Pharmaceuticals's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2024 was 7.962 (Jun. 2023 ) + 11.749 (Sep. 2023 ) + -1.561 (Dec. 2023 ) + -230.919 (Mar. 2024 ) = $-212.77 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.
Longboard Pharmaceuticals (NAS:LBPH) 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 Mar. 2024, Longboard Pharmaceuticals has a Sloan Ratio of 63.41%, indicating earnings are more likely to be made up of accruals.
Longboard Pharmaceuticals Sloan Ratio % Related Terms
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Longboard Pharmaceuticals (Longboard Pharmaceuticals) Business Description
Longboard Pharmaceuticals Inc is a clinical-stage biopharmaceutical company focused on developing novel, transformative medicines for neurological diseases. The company is working to improve a portfolio of centrally acting product candidates designed to be selective for specific G protein-coupled receptors (GPCRs). The company is evaluating LP352, an oral, centrally acting 5-hydroxytryptamine 2C (5-HT2C) receptor superagonist, with negligible observed impact on 5-HT2B and 5-HT2A receptor subtypes, in development for the potential treatment of seizures associated with a broad range of developmental and epileptic encephalopathies.
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