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.
Varian Medical Systems's Sloan Ratio for the quarter that ended in Dec. 2020 was -1.82%.
As of Dec. 2020, Varian Medical Systems has a Sloan Ratio of -1.82%, indicating the company is in the safe zone and there is no funny business with accruals.
Varian Medical Systems 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 Varian Medical Systems's Sloan Ratio %
For the Medical Instruments & Supplies subindustry, Varian Medical Systems'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.
Varian Medical Systems's Sloan Ratio % Distribution in the Medical Devices & Instruments Industry
For the Medical Devices & Instruments industry and Healthcare sector, Varian Medical Systems's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Varian Medical Systems's Sloan Ratio % falls into.
Varian Medical Systems 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.
Varian Medical Systems's Sloan Ratio for the fiscal year that ended in Sep. 2020 is calculated as
Varian Medical Systems's Net Income for the trailing twelve months (TTM) ended in Dec. 2020 was 43.2 (Mar. 2020 ) + 61.2 (Jun. 2020 ) + 76.6 (Sep. 2020 ) + 96.5 (Dec. 2020 ) = $278 Mil.
Varian Medical Systems's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2020 was 21.9 (Mar. 2020 ) + 83 (Jun. 2020 ) + 266.6 (Sep. 2020 ) + 141.4 (Dec. 2020 ) = $513 Mil.
Varian Medical Systems's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2020 was -21.1 (Mar. 2020 ) + -41.1 (Jun. 2020 ) + -63 (Sep. 2020 ) + -27.6 (Dec. 2020 ) = $-153 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.
Varian Medical Systems (NYSE:VAR) 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. 2020, Varian Medical Systems has a Sloan Ratio of -1.82%, indicating the company is in the safe zone and there is no funny business with accruals.
Varian Medical Systems Sloan Ratio % Related Terms
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Varian Medical Systems (Varian Medical Systems) Business Description
Varian Medical Systems designs, manufactures, and sells radiation technology for use in two business segments: oncology systems and proton therapy. The Americas account for the largest portion of revenue (47%), followed by Europe, the Middle East, and Africa (33%) and Asia-Pacific (19%).
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