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.
As of Mar. 2024, Monolithic Power Systems has a Sloan Ratio of 7.74%, indicating the company is in the safe zone and there is no funny business with accruals.
Monolithic Power Systems Sloan Ratio % Historical Data
* 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 Monolithic Power Systems's Sloan Ratio %
For the Semiconductors subindustry, Monolithic Power Systems'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.
Monolithic Power Systems's Sloan Ratio % Distribution in the Semiconductors Industry
For the Semiconductors industry and Technology sector, Monolithic Power Systems's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Monolithic Power Systems's Sloan Ratio % falls into.
Monolithic Power Systems 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.
Monolithic Power Systems's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Monolithic Power Systems's Net Income for the trailing twelve months (TTM) ended in Mar. 2024 was 99.504 (Jun. 2023 ) + 121.163 (Sep. 2023 ) + 96.905 (Dec. 2023 ) + 92.541 (Mar. 2024 ) = $410 Mil.
Monolithic Power Systems's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2024 was 90.185 (Jun. 2023 ) + 175.908 (Sep. 2023 ) + 153.313 (Dec. 2023 ) + 248.051 (Mar. 2024 ) = $667 Mil.
Monolithic Power Systems's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2024 was -12.051 (Jun. 2023 ) + -212.958 (Sep. 2023 ) + 33.969 (Dec. 2023 ) + -266.015 (Mar. 2024 ) = $-457 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.
Monolithic Power Systems (NAS:MPWR) 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, Monolithic Power Systems has a Sloan Ratio of 7.74%, indicating the company is in the safe zone and there is no funny business with accruals.
Monolithic Power Systems Sloan Ratio % Related Terms
Thank you for viewing the detailed overview of Monolithic Power Systems's Sloan Ratio % provided by GuruFocus.com. Please click on the following links to see related term pages.
Monolithic Power Systems (Monolithic Power Systems) Business Description
Monolithic Power Systems is an analog and mixed-signal chipmaker, specializing in power management solutions. The firm's mission is to reduce total energy consumption in end systems, and it serves the computing, automotive, industrial, communications, and consumer end markets. MPS uses a fabless manufacturing model, partnering with third-party chip foundries to host its proprietary BCD process technology.
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
Portfolio Contest
MPWR has been successfully added to your 