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 Jun. 2019, Monotype Imaging Holdings has a Sloan Ratio of -1.70%, indicating the company is in the safe zone and there is no funny business with accruals.
Monotype Imaging 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 Monotype Imaging Holdings's Sloan Ratio %
For the Software - Application subindustry, Monotype Imaging 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.
Monotype Imaging Holdings's Sloan Ratio % Distribution in the Software Industry
For the Software industry and Technology sector, Monotype Imaging Holdings's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Monotype Imaging Holdings's Sloan Ratio % falls into.
Monotype Imaging 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.
Monotype Imaging Holdings's Sloan Ratio for the fiscal year that ended in Dec. 2018 is calculated as
Monotype Imaging Holdings's Net Income for the trailing twelve months (TTM) ended in Jun. 2019 was 3.321 (Sep. 2018 ) + 9.456 (Dec. 2018 ) + 2.66 (Mar. 2019 ) + 10.307 (Jun. 2019 ) = $25.7 Mil.
Monotype Imaging Holdings's Cash Flow from Operations for the trailing twelve months (TTM) ended in Jun. 2019 was 8.092 (Sep. 2018 ) + 11.389 (Dec. 2018 ) + 4.095 (Mar. 2019 ) + 13.006 (Jun. 2019 ) = $36.6 Mil.
Monotype Imaging Holdings's Cash Flow from Investing for the trailing twelve months (TTM) ended in Jun. 2019 was -0.551 (Sep. 2018 ) + -0.93 (Dec. 2018 ) + -0.411 (Mar. 2019 ) + -0.4 (Jun. 2019 ) = $-2.3 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.
Monotype Imaging Holdings (NAS:TYPE) 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. 2019, Monotype Imaging Holdings has a Sloan Ratio of -1.70%, indicating the company is in the safe zone and there is no funny business with accruals.
Monotype Imaging Holdings Sloan Ratio % Related Terms
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Monotype Imaging Holdings (Monotype Imaging Holdings) Business Description
Monotype Imaging Holdings Inc. is a provider of typeface, technology and expertise for creative applications and consumer devices. Its business is organized in two units with one serving creative professionals, and the other serving original equipment manufacturers. The former helps customers provide branded or personalized content across multiple devices and mediums. The latter provides manufacturers and software vendors solutions to deliver consistent user experiences. The company derives revenue from licenses and per-unit royalties. A majority of the firm's revenue is generated in the United States, and the rest in the United Kingdom, Germany, Japan, and the rest of Asia.
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