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 Dec. 2023, Zimmer Biomet Holdings has a Sloan Ratio of 1.03%, indicating the company is in the safe zone and there is no funny business with accruals.
Zimmer Biomet Holdings 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 Zimmer Biomet Holdings's Sloan Ratio %
For the Medical Devices subindustry, Zimmer Biomet 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.
Zimmer Biomet Holdings's Sloan Ratio % Distribution in the Medical Devices & Instruments Industry
For the Medical Devices & Instruments industry and Healthcare sector, Zimmer Biomet Holdings's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Zimmer Biomet Holdings's Sloan Ratio % falls into.
Zimmer Biomet 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.
Zimmer Biomet Holdings's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Zimmer Biomet Holdings's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was 232.5 (Mar. 2023 ) + 209.6 (Jun. 2023 ) + 162.7 (Sep. 2023 ) + 419.2 (Dec. 2023 ) = $1,024 Mil.
Zimmer Biomet Holdings's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was 307.7 (Mar. 2023 ) + 347.9 (Jun. 2023 ) + 337.6 (Sep. 2023 ) + 588.4 (Dec. 2023 ) = $1,582 Mil.
Zimmer Biomet Holdings's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -149.4 (Mar. 2023 ) + -243.1 (Jun. 2023 ) + -165.6 (Sep. 2023 ) + -220.8 (Dec. 2023 ) = $-779 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.
Zimmer Biomet Holdings (NYSE:ZBH) 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, Zimmer Biomet Holdings has a Sloan Ratio of 1.03%, indicating the company is in the safe zone and there is no funny business with accruals.
Zimmer Biomet Holdings Sloan Ratio % Related Terms
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Zimmer Biomet Holdings (Zimmer Biomet Holdings) Business Description
Zimmer Biomet designs, manufactures, and markets orthopedic reconstructive implants, as well as supplies and surgical equipment for orthopedic surgery. With the acquisitions of Centerpulse in 2003 and Biomet in 2015, Zimmer holds the leading share of the reconstructive market in the United States, Europe, and Japan. Roughly two thirds of total revenue is derived from sales of large joints, another quarter comes from extremities, trauma, sports medicine, and related surgical products. The firm spun out its dental and spine businesses in 2022.
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