Stock Analysis on Net

eBay Inc. (NASDAQ:EBAY)

This company has been moved to the archive! The financial data has not been updated since October 24, 2019.

Financial Reporting Quality: Aggregate Accruals

Microsoft Excel

Earnings can be decomposed into cash and accrual components. The accrual component (aggregate accruals) has been found to have less persistence than the cash component, and therefore (1) earnings with higher accrual component are less persistent than earnings with smaller accrual component, all else equal; and (2) the cash component of earnings should receive a higher weighting evaluating company performance.


Balance-Sheet-Based Accruals Ratio

eBay Inc., balance sheet computation of aggregate accruals

US$ in millions

Microsoft Excel
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Operating Assets
Total assets 22,819 25,981 23,847 17,785 45,132
Less: Cash and cash equivalents 2,202 2,120 1,816 1,832 6,328
Less: Short-term investments 2,713 3,743 5,333 4,299 3,770
Operating assets 17,904 20,118 16,698 11,654 35,034
Operating Liabilities
Total liabilities 16,538 17,918 13,308 11,209 25,226
Less: Short-term debt 1,546 781 1,451 850
Less: Long-term debt 7,685 9,234 7,509 6,779 6,777
Operating liabilities 7,307 7,903 4,348 4,430 17,599
 
Net operating assets1 10,597 12,215 12,350 7,224 17,435
Balance-sheet-based aggregate accruals2 (1,618) (135) 5,126 (10,211)
Financial Ratio
Balance-sheet-based accruals ratio3 -14.19% -1.10% 52.38% -82.82%
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
Amazon.com Inc.
Home Depot Inc.
Lowe’s Cos. Inc.
TJX Cos. Inc.

Based on: 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31).

1 2018 Calculation
Net operating assets = Operating assets – Operating liabilities
= 17,9047,307 = 10,597

2 2018 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2018 – Net operating assets2017
= 10,59712,215 = -1,618

3 2018 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × -1,618 ÷ [(10,597 + 12,215) ÷ 2] = -14.19%

4 Click competitor name to see calculations.

Financial ratio Description The company
Balance-sheet-based accruals ratio Ratio is found by dividing balance-sheet-based aggregate accruals by average net operating assets. Using the balance-sheet-based accruals ratio, eBay Inc. deteriorated earnings quality from 2017 to 2018.

Cash-Flow-Statement-Based Accruals Ratio

eBay Inc., cash flow statement computation of aggregate accruals

US$ in millions

Microsoft Excel
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Net income (loss) 2,530 (1,016) 7,266 1,725 46
Less: Net cash provided by operating activities 2,661 3,146 2,827 2,877 5,677
Less: Net cash (used in) provided by investing activities 2,894 (1,296) (2,008) (673) (2,673)
Cash-flow-statement-based aggregate accruals (3,025) (2,866) 6,447 (479) (2,958)
Financial Ratio
Cash-flow-statement-based accruals ratio1 -26.52% -23.33% 65.87% -3.88%
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
Amazon.com Inc.
Home Depot Inc.
Lowe’s Cos. Inc.
TJX Cos. Inc.

Based on: 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31).

1 2018 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × -3,025 ÷ [(10,597 + 12,215) ÷ 2] = -26.52%

2 Click competitor name to see calculations.

Financial ratio Description The company
Cash-flow-statement-based accruals ratio Ratio is found by dividing cash-flow-statement-based aggregate accruals by average net operating assets. Using the cash-flow-statement-based accruals ratio, eBay Inc. deteriorated earnings quality from 2017 to 2018.