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.
Abingdon Health's Sloan Ratio for the quarter that ended in Dec. 2023 was 1.12%.
Warning Sign:
When sloan ratio (-70.88)% higher than 25% or lower than -25%, earnings are more likely to be made up of accruals.
As of Dec. 2023, Abingdon Health has a Sloan Ratio of 1.12%, indicating the company is in the safe zone and there is no funny business with accruals.
Abingdon Health Sloan Ratio % Historical Data
The historical data trend for Abingdon Health'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 Abingdon Health's Sloan Ratio %
For the Diagnostics & Research subindustry, Abingdon Health'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.
Abingdon Health's Sloan Ratio % Distribution in the Medical Diagnostics & Research Industry
For the Medical Diagnostics & Research industry and Healthcare sector, Abingdon Health's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Abingdon Health's Sloan Ratio % falls into.
Abingdon Health 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.
Abingdon Health's Sloan Ratio for the fiscal year that ended in Jun. 2023 is calculated as
For company reported semi-annually, GuruFocus uses latest two semi-annual data as the TTM data.
Abingdon Health's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was -1.03 (Jun. 2023 ) + -1.205 (Dec. 2023 ) = £-2.24 Mil.
Abingdon Health's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was -1.052 (Jun. 2023 ) + -1.199 (Dec. 2023 ) = £-2.25 Mil.
Abingdon Health's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -0.042 (Jun. 2023 ) + 0.004 (Dec. 2023 ) = £-0.04 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.
Abingdon Health (LSE:ABDX) 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, Abingdon Health has a Sloan Ratio of 1.12%, indicating the company is in the safe zone and there is no funny business with accruals.
Abingdon Health Sloan Ratio % Related Terms
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Abingdon Health PLC is a technology-enabled lateral flow diagnostics company. It provides rapid testing solutions to clients in healthcare and other industries. The firm's product ABC-19 is an antibody test for Covid-19 , and also produces tests covering areas such as self-test HIV, equine infection, human fertility, etc. Business operating segments includes; Contract Development comprises development work for third parties. Contract Manufacturing comprises contract development and manufacturing activities. Product Sales comprises the sale of ABC-19, Pocket Diagnostic products, PCRD tests and antibodies for research use. Key revenue comes from Contract Development segment. Geographically it operates and earns revenue from the UK, USA and Canada, Europe and the rest of the world.
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