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.
The Trade Desk's Sloan Ratio for the quarter that ended in Mar. 2024 was -6.32%.
As of Mar. 2024, The Trade Desk has a Sloan Ratio of -6.32%, indicating the company is in the safe zone and there is no funny business with accruals.
The Trade Desk Sloan Ratio % Historical Data
The historical data trend for The Trade Desk'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 The Trade Desk's Sloan Ratio %
For the Software - Application subindustry, The Trade Desk'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.
The Trade Desk's Sloan Ratio % Distribution in the Software Industry
For the Software industry and Technology sector, The Trade Desk's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where The Trade Desk's Sloan Ratio % falls into.
The Trade Desk 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.
The Trade Desk's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
The Trade Desk's Net Income for the trailing twelve months (TTM) ended in Mar. 2024 was 32.939 (Jun. 2023 ) + 39.352 (Sep. 2023 ) + 97.323 (Dec. 2023 ) + 31.66 (Mar. 2024 ) = $201 Mil.
The Trade Desk's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2024 was 128.089 (Jun. 2023 ) + 191.54 (Sep. 2023 ) + 91.12 (Dec. 2023 ) + 185.472 (Mar. 2024 ) = $596 Mil.
The Trade Desk's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2024 was -33.264 (Jun. 2023 ) + 11.335 (Sep. 2023 ) + -57.051 (Dec. 2023 ) + -21.119 (Mar. 2024 ) = $-100 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.
The Trade Desk (NAS:TTD) 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, The Trade Desk has a Sloan Ratio of -6.32%, indicating the company is in the safe zone and there is no funny business with accruals.
The Trade Desk Sloan Ratio % Related Terms
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The Trade Desk (The Trade Desk) Business Description
The Trade Desk provides a self-service platform that helps advertisers and ad agencies programmatically find and purchase digital ad inventory (display, video, audio, native, and social) on different devices like computers, smartphones, digital out of home, and connected TVs. It utilizes data to optimize the performance of ad impressions purchased. The firm's platform is referred to as a demand-side platform in the digital ad industry. The firm generates its revenue from fees based on a percentage of what its clients spend on advertising. The Trade Desk became a public company in 2016 and has since increased revenue at a 43% average annual rate. During that period, it has been profitable with operating margins of 10%-28%.
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