Stock Analysis on Net

Advanced Micro Devices Inc. (NASDAQ:AMD)

Financial Reporting Quality: Aggregate Accruals 

Microsoft Excel LibreOffice Calc

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

Advanced Micro Devices Inc., balance sheet computation of aggregate accruals

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 25, 2021 Dec 26, 2020 Dec 28, 2019 Dec 29, 2018 Dec 30, 2017
Operating Assets
Total assets 12,419  8,962  6,028  4,556  3,540 
Less: Cash and cash equivalents 2,535  1,595  1,466  1,078  1,185 
Less: Short-term investments 1,073  695  37  78  — 
Operating assets 8,811  6,672  4,525  3,400  2,355 
Operating Liabilities
Total liabilities 4,922  3,125  3,201  3,290  2,929 
Less: Short-term debt, net —  —  —  136  70 
Less: Current portion of long-term debt, net 312  —  —  —  — 
Less: Long-term debt, net of current portion 330  486  1,114  1,325 
Operating liabilities 4,609  2,795  2,715  2,040  1,534 
 
Net operating assets1 4,202  3,877  1,810  1,360  821 
Balance-sheet-based aggregate accruals2 325  2,067  450  539  — 
Financial Ratio
Balance-sheet-based accruals ratio3 8.05% 72.69% 28.39% 49.43%
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
Analog Devices Inc. 90.70% -2.85% 0.29% -2.75% 142.61%
Applied Materials Inc. 17.33% 3.75% 19.87% 9.56% 7.98%
Broadcom Inc. -8.72% 8.42% 27.77% 29.77% -9.33%
Intel Corp. 11.61% 0.01% 4.20% 8.12%
Lam Research Corp. 21.20% 12.45% -6.77% 10.60% 0.89%
Micron Technology Inc. 11.51% 7.56% 11.13% 20.96% 30.97%
NVIDIA Corp. 115.40% -16.93% 49.27% 28.14%
Qualcomm Inc. 22.56% 20.94% 48.90% -98.54% -47.48%
Texas Instruments Inc. 18.48% 1.00% -5.28% -1.17%
Balance-Sheet-Based Accruals Ratio, Sector
Semiconductors & Semiconductor Equipment 20.07% 4.72% 12.10% 7.37%
Balance-Sheet-Based Accruals Ratio, Industry
Information Technology 19.17% 2.17% 13.41% -3.21%

Based on: 10-K (reporting date: 2021-12-25), 10-K (reporting date: 2020-12-26), 10-K (reporting date: 2019-12-28), 10-K (reporting date: 2018-12-29), 10-K (reporting date: 2017-12-30).

1 2021 Calculation
Net operating assets = Operating assets – Operating liabilities
= 8,8114,609 = 4,202

2 2021 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2021 – Net operating assets2020
= 4,2023,877 = 325

3 2021 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × 325 ÷ [(4,202 + 3,877) ÷ 2] = 8.05%

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, Advanced Micro Devices Inc. improved earnings quality from 2020 to 2021.

Cash-Flow-Statement-Based Accruals Ratio

Advanced Micro Devices Inc., cash flow statement computation of aggregate accruals

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 25, 2021 Dec 26, 2020 Dec 28, 2019 Dec 29, 2018 Dec 30, 2017
Net income 3,162  2,490  341  337  43 
Less: Net cash provided by operating activities 3,521  1,071  493  34  68 
Less: Net cash used in investing activities (686) (952) (149) (170) (114)
Cash-flow-statement-based aggregate accruals 327  2,371  (3) 473  89 
Financial Ratio
Cash-flow-statement-based accruals ratio1 8.10% 83.38% -0.19% 43.37%
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
Analog Devices Inc. -11.85% -3.72% -3.61% -3.78% 62.93%
Applied Materials Inc. 14.75% -0.54% -1.09% -13.49% 33.14%
Broadcom Inc. -12.34% 3.65% 18.25% 23.21% -13.51%
Intel Corp. 15.15% 6.75% 2.52% 3.32%
Lam Research Corp. 5.16% 9.16% 16.67% -78.67% 47.67%
Micron Technology Inc. 10.01% 5.45% 9.74% 17.59% 20.50%
NVIDIA Corp. 233.25% -225.09% 143.36% -83.66%
Qualcomm Inc. 15.61% 48.48% -30.37% -127.94% -102.91%
Texas Instruments Inc. 29.95% 4.03% 3.01% -15.48%
Cash-Flow-Statement-Based Accruals Ratio, Sector
Semiconductors & Semiconductor Equipment 12.48% 3.86% 7.50% -2.38%
Cash-Flow-Statement-Based Accruals Ratio, Industry
Information Technology 10.59% -6.24% -9.17% -17.50%

Based on: 10-K (reporting date: 2021-12-25), 10-K (reporting date: 2020-12-26), 10-K (reporting date: 2019-12-28), 10-K (reporting date: 2018-12-29), 10-K (reporting date: 2017-12-30).

1 2021 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × 327 ÷ [(4,202 + 3,877) ÷ 2] = 8.10%

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, Advanced Micro Devices Inc. improved earnings quality from 2020 to 2021.