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.
ReadSoft AB's Sloan Ratio for the quarter that ended in Jun. 2014 was 0.57%.
As of Jun. 2014, ReadSoft AB has a Sloan Ratio of 0.57%, indicating the company is in the safe zone and there is no funny business with accruals.
ReadSoft AB Sloan Ratio % Historical Data
The historical data trend for ReadSoft AB'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 ReadSoft AB's Sloan Ratio %
For the Software - Application subindustry, ReadSoft AB'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.
ReadSoft AB's Sloan Ratio % Distribution in the Software Industry
For the Software industry and Technology sector, ReadSoft AB's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where ReadSoft AB's Sloan Ratio % falls into.
ReadSoft AB 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.
ReadSoft AB's Sloan Ratio for the fiscal year that ended in Dec. 2013 is calculated as
ReadSoft AB's Net Income for the trailing twelve months (TTM) ended in Jun. 2014 was -4.7 (Sep. 2013 ) + 18.717 (Dec. 2013 ) + -11.8 (Mar. 2014 ) + 4 (Jun. 2014 ) = kr6.2 Mil.
ReadSoft AB's Cash Flow from Operations for the trailing twelve months (TTM) ended in Jun. 2014 was -5.1 (Sep. 2013 ) + 16.725 (Dec. 2013 ) + 54.2 (Mar. 2014 ) + 18.4 (Jun. 2014 ) = kr84.2 Mil.
ReadSoft AB's Cash Flow from Investing for the trailing twelve months (TTM) ended in Jun. 2014 was -18 (Sep. 2013 ) + -22.66 (Dec. 2013 ) + -21.1 (Mar. 2014 ) + -20.9 (Jun. 2014 ) = kr-82.7 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.
ReadSoft AB (OSTO:RSOF B) 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 Jun. 2014, ReadSoft AB has a Sloan Ratio of 0.57%, indicating the company is in the safe zone and there is no funny business with accruals.
ReadSoft AB Sloan Ratio % Related Terms
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ReadSoft AB is a Sweden-based company that creates and markets software and services for document automation, processes such as data entry, information verification, document workflows, and e-voicing. The company operates in over 16 countries worldwide, with partnerships in an additional 70. The company offers solutions primarily for industries such as banking, manufacturing, service bureaus, market research, insurance, government, and medical. Major customers include IKEA, Audi, Porsche, Yves Rocher, Swedish Tax, DaimlerChrysler, HSBS Bank, Avon, Bosch, London Underground, New York Transit, Toyota, Volvo, Monoprix, Ericsson, and ING. The company is headquartered in Helsingborg, Sweden. The company offers ReadSoft DOCUMENTS, a complete software platform for document automation. The product incorporates five Automation Areas: Capture, capturing the information in any format and making it ready for electronic processing; Understand, enabling the computer to read, sort, interpret, extract, and index documents electronically; Manage, providing customers with control of electronic documents, including the verification and quality control with archiving and monitoring capabilities; Integrate, integration with the business software; and Interchange, Electronic Data Interchange. Capabilities within each Automation Area are customized to the needs of the customer, and solutions can be expanded to include any required extra capabilities. Also, this software can be integrated with systems such as SAP and Oracle E-Business Suite, Intentia, and IFS. ReadSoft business solutions for specific areas include: ReadSoft Documents for Mailrooms, Documents for EDI, Documents for Invoices, and Documents for Forms. Additionally, the company offers Professional Services such as project management and customization, Solution Optimization, Training, and Technical Support.
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