What is West Pharmaceutical Services Sloan Ratio %?
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 Mar. 2024, West Pharmaceutical Services has a Sloan Ratio of 5.25%, indicating the company is in the safe zone and there is no funny business with accruals.
West Pharmaceutical Services 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 West Pharmaceutical Services's Sloan Ratio %
For the Medical Instruments & Supplies subindustry, West Pharmaceutical Services'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.
West Pharmaceutical Services's Sloan Ratio % Distribution in the Medical Devices & Instruments Industry
For the Medical Devices & Instruments industry and Healthcare sector, West Pharmaceutical Services's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where West Pharmaceutical Services's Sloan Ratio % falls into.
West Pharmaceutical Services 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.
West Pharmaceutical Services's Net Income for the trailing twelve months (TTM) ended in Mar. 2024 was 155.1 (Jun. 2023 ) + 161.3 (Sep. 2023 ) + 137 (Dec. 2023 ) + 115.3 (Mar. 2024 ) = $569 Mil.
West Pharmaceutical Services's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2024 was 169.2 (Jun. 2023 ) + 230.1 (Sep. 2023 ) + 239.1 (Dec. 2023 ) + 118.2 (Mar. 2024 ) = $757 Mil.
West Pharmaceutical Services's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2024 was -82.1 (Jun. 2023 ) + -95.7 (Sep. 2023 ) + -108.8 (Dec. 2023 ) + -90.6 (Mar. 2024 ) = $-377 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.
West Pharmaceutical Services (NYSE:WST) 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 Mar. 2024, West Pharmaceutical Services has a Sloan Ratio of 5.25%, indicating the company is in the safe zone and there is no funny business with accruals.
West Pharmaceutical Services Sloan Ratio % Related Terms
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West Pharmaceutical Services (West Pharmaceutical Services) Business Description
West Pharmaceutical Services is a Pennsylvania-based medical supplies company that operates as a key supplier to firms in the pharmaceutical, biotechnology, and generic drug industries. West develops, manufactures, and distributes elastomer-based supplies for the containment and administration of injectable drugs, including basic equipment such as syringes, stoppers, and plungers, along with somewhat more complicated devices including auto-injectors and other self-injection platforms. The company reports in two segments: proprietary products (82% of 2021 sales) and contract-manufactured products (18%). It generates 55% of its revenue from international markets and 45% from the United States.
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