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.
Red Cat Holdings's Sloan Ratio for the quarter that ended in Jan. 2024 was -37.12%.
Warning Sign:
When sloan ratio (-45.65)% higher than 25% or lower than -25%, earnings are more likely to be made up of accruals.
As of Jan. 2024, Red Cat Holdings has a Sloan Ratio of -37.12%, indicating earnings are more likely to be made up of accruals.
Red Cat Holdings Sloan Ratio % Historical Data
The historical data trend for Red Cat Holdings'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 Red Cat Holdings's Sloan Ratio %
For the Computer Hardware subindustry, Red Cat Holdings'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.
Red Cat Holdings's Sloan Ratio % Distribution in the Hardware Industry
For the Hardware industry and Technology sector, Red Cat Holdings's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Red Cat Holdings's Sloan Ratio % falls into.
Red Cat Holdings 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.
Red Cat Holdings's Sloan Ratio for the fiscal year that ended in Apr. 2023 is calculated as
Red Cat Holdings's Net Income for the trailing twelve months (TTM) ended in Jan. 2024 was -11.366 (Apr. 2023 ) + -5.81 (Jul. 2023 ) + -5.681 (Oct. 2023 ) + -5.489 (Jan. 2024 ) = $-28.35 Mil.
Red Cat Holdings's Cash Flow from Operations for the trailing twelve months (TTM) ended in Jan. 2024 was -12.393 (Apr. 2023 ) + -6.926 (Jul. 2023 ) + -4.314 (Oct. 2023 ) + -4.115 (Jan. 2024 ) = $-27.75 Mil.
Red Cat Holdings's Cash Flow from Investing for the trailing twelve months (TTM) ended in Jan. 2024 was 7.294 (Apr. 2023 ) + 4.883 (Jul. 2023 ) + 5.182 (Oct. 2023 ) + 2.576 (Jan. 2024 ) = $19.94 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.
Red Cat Holdings (NAS:RCAT) 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 Jan. 2024, Red Cat Holdings has a Sloan Ratio of -37.12%, indicating earnings are more likely to be made up of accruals.
Red Cat Holdings Sloan Ratio % Related Terms
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Red Cat Holdings (Red Cat Holdings) Business Description
Red Cat Holdings Inc is a military technology company that integrates robotic hardware and software to provide critical situational awareness and actionable intelligence to on-the-ground warfighters and battlefield commanders. Its mission is to enhance the effectiveness and safety of military operations domestically and globally. Red Cat's suite of solutions includes Teal Drones, developer of the Golden Eagle, a small unmanned system with the highest resolution imaging for night-time operations, and Skypersonic, a leading provider of unmanned aircraft for interior spaces and other dangerous environments.
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