Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

CSX Corp. (NASDAQ:CSX)

Financial Reporting Quality: Aggregate Accruals

Advanced level

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

CSX Corp., balance sheet computation of aggregate accruals

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 30, 2016
Operating Assets
Total assets 39,793  38,257  36,729  35,739  35,414 
Less: Cash and cash equivalents 3,129  958  858  401  603 
Less: Short-term investments 996  253  18  417 
Operating assets 36,662  36,303  35,618  35,320  34,394 
Operating Liabilities
Total liabilities 26,683  26,394  24,149  21,018  23,720 
Less: Current maturities of long-term debt 401  245  18  19  331 
Less: Long-term debt, excluding current portion 16,304  15,993  14,739  11,790  10,962 
Operating liabilities 9,978  10,156  9,392  9,209  12,427 
 
Net operating assets1 26,684  26,147  26,226  26,111  21,967 
Balance-sheet-based aggregate accruals2 537  (79) 115  4,144  — 
Financial Ratio
Balance-sheet-based accruals ratio3 2.03% -0.30% 0.44% 17.24%
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
FedEx Corp. 7.01% 0.86% 19.08% 11.41% 26.37%
Norfolk Southern Corp. -1.67% 2.46% 2.49% 16.28%
Union Pacific Corp. -1.44% 2.28% 2.48% 18.50%
United Parcel Service Inc. -18.06% 9.38% -2.44% 56.12%
Balance-Sheet-Based Accruals Ratio, Sector
Industrial Transportation 0.00% 2.58% 4.84% 21.34%
Balance-Sheet-Based Accruals Ratio, Industry
Industrials 0.00% -6.11% 1.08% 10.08%

Based on: 10-K (filing date: 2021-02-10), 10-K (filing date: 2020-02-12), 10-K (filing date: 2019-02-06), 10-K (filing date: 2018-02-07), 10-K (filing date: 2017-02-14).

1 2020 Calculation
Net operating assets = Operating assets – Operating liabilities
= 36,6629,978 = 26,684

2 2020 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2020 – Net operating assets2019
= 26,68426,147 = 537

3 2020 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × 537 ÷ [(26,684 + 26,147) ÷ 2] = 2.03%

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, CSX Corp. deteriorated earnings quality from 2019 to 2020.

Cash-Flow-Statement-Based Accruals Ratio

CSX Corp., cash flow statement computation of aggregate accruals

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 30, 2016
Net earnings 2,765  3,331  3,309  5,471  1,714 
Less: Net cash provided by operating activities 4,263  4,850  4,641  3,472  3,041 
Less: Net cash used in investing activities (649) (2,102) (1,684) (1,495) (1,798)
Cash-flow-statement-based aggregate accruals (849) 583  352  3,494  471 
Financial Ratio
Cash-flow-statement-based accruals ratio1 -3.21% 2.23% 1.35% 14.53%
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
FedEx Corp. 5.95% 1.22% 18.65% 11.92% 26.08%
Norfolk Southern Corp. -1.69% 2.24% 2.32% 15.40%
Union Pacific Corp. -1.22% 1.77% 1.68% 17.71%
United Parcel Service Inc. -18.35% 8.56% -7.57% 50.66%
Cash-Flow-Statement-Based Accruals Ratio, Sector
Industrial Transportation 0.00% 2.80% 3.91% 19.82%
Cash-Flow-Statement-Based Accruals Ratio, Industry
Industrials 0.00% -2.60% -2.05% 0.01%

Based on: 10-K (filing date: 2021-02-10), 10-K (filing date: 2020-02-12), 10-K (filing date: 2019-02-06), 10-K (filing date: 2018-02-07), 10-K (filing date: 2017-02-14).

1 2020 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × -849 ÷ [(26,684 + 26,147) ÷ 2] = -3.21%

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, CSX Corp. deteriorated earnings quality from 2019 to 2020.