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.
IPG Photonics's Sloan Ratio for the quarter that ended in Dec. 2023 was 5.94%.
As of Dec. 2023, IPG Photonics has a Sloan Ratio of 5.94%, indicating the company is in the safe zone and there is no funny business with accruals.
IPG Photonics Sloan Ratio % Historical Data
The historical data trend for IPG Photonics'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 IPG Photonics's Sloan Ratio %
For the Semiconductor Equipment & Materials subindustry, IPG Photonics'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.
IPG Photonics's Sloan Ratio % Distribution in the Semiconductors Industry
For the Semiconductors industry and Technology sector, IPG Photonics's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where IPG Photonics's Sloan Ratio % falls into.
IPG Photonics 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.
IPG Photonics's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
IPG Photonics's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was 60.135 (Mar. 2023 ) + 62.321 (Jun. 2023 ) + 54.994 (Sep. 2023 ) + 41.428 (Dec. 2023 ) = $219 Mil.
IPG Photonics's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was 37.28 (Mar. 2023 ) + 66.666 (Jun. 2023 ) + 85.978 (Sep. 2023 ) + 106.062 (Dec. 2023 ) = $296 Mil.
IPG Photonics's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -96.018 (Mar. 2023 ) + 5.477 (Jun. 2023 ) + -72.455 (Sep. 2023 ) + -74.558 (Dec. 2023 ) = $-238 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.
IPG Photonics (NAS:IPGP) 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, IPG Photonics has a Sloan Ratio of 5.94%, indicating the company is in the safe zone and there is no funny business with accruals.
IPG Photonics Sloan Ratio % Related Terms
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IPG Photonics (IPG Photonics) Business Description
IPG Photonics Corp is a vertically integrated developer and manufacturer of high-performance fiber lasers, fiber amplifiers, and diode lasers, which are used in diverse applications in the manufacturing, automotive, industrial, aerospace, semiconductor, and consumer end markets. A large majority of the firm's revenue is derived from materials processing applications for fiber lasers, including cutting and welding, marking and engraving, and micro-processing. Roughly a third of the firm's revenue is generated in China, with the rest coming from North America, Europe, Japan, Australia, and other countries across the world.
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