Financial Reporting Quality: Aggregate Accruals
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
CrowdStrike Holdings Inc., balance sheet computation of aggregate accruals
US$ in thousands
| Jan 31, 2026 | Jan 31, 2025 | Jan 31, 2024 | Jan 31, 2023 | Jan 31, 2022 | Jan 31, 2021 | ||
|---|---|---|---|---|---|---|---|
| Operating Assets | |||||||
| Total assets | 11,086,684) | 8,701,578) | 6,646,520) | 5,026,540) | 3,618,381) | 2,732,533) | |
| Less: Cash and cash equivalents | 5,230,125) | 4,323,295) | 3,375,069) | 2,455,369) | 1,996,633) | 1,918,608) | |
| Less: Short-term investments | —) | —) | 99,591) | 250,000) | —) | —) | |
| Operating assets | 5,856,559) | 4,378,283) | 3,171,860) | 2,321,171) | 1,621,748) | 813,925) | |
| Operating Liabilities | |||||||
| Total liabilities | 6,614,079) | 5,382,661) | 4,309,431) | 3,539,106) | 2,580,738) | 1,860,659) | |
| Less: Long-term debt | 745,471) | 743,983) | 742,494) | 741,005) | 739,517) | 738,029) | |
| Operating liabilities | 5,868,608) | 4,638,678) | 3,566,937) | 2,798,101) | 1,841,221) | 1,122,630) | |
| Net operating assets1 | (12,049) | (260,395) | (395,077) | (476,930) | (219,473) | (308,705) | |
| Balance-sheet-based aggregate accruals2 | 248,346) | 134,682) | 81,853) | (257,457) | 89,232) | —) | |
| Financial Ratio | |||||||
| Balance-sheet-based accruals ratio3 | — | — | — | — | — | — | |
| Benchmarks | |||||||
| Balance-Sheet-Based Accruals Ratio, Competitors4 | |||||||
| Accenture PLC | — | 2.83% | 35.69% | 16.32% | 21.70% | 27.93% | |
| Adobe Inc. | — | -5.28% | -3.83% | 1.85% | -8.24% | 14.14% | |
| AppLovin Corp. | — | -20.02% | -0.63% | -1.52% | 36.28% | — | |
| Cadence Design Systems Inc. | — | 9.47% | 39.84% | 11.17% | 26.65% | — | |
| Datadog Inc. | — | 53.88% | -28.51% | -35.73% | 17.56% | — | |
| International Business Machines Corp. | — | 16.28% | 2.79% | 2.42% | 1.55% | — | |
| Intuit Inc. | — | 3.52% | 3.35% | -1.74% | 85.68% | 139.73% | |
| Microsoft Corp. | — | 21.81% | 52.18% | 22.96% | 42.27% | 40.52% | |
| Oracle Corp. | — | 20.79% | 4.30% | 51.77% | 9.90% | 5.62% | |
| Palantir Technologies Inc. | — | 509.21% | — | — | — | — | |
| Palo Alto Networks Inc. | — | 32.24% | 89.91% | 137.01% | -124.73% | 85.21% | |
| Salesforce Inc. | 13.74% | 0.71% | -2.46% | -2.30% | 57.74% | — | |
| ServiceNow Inc. | — | 41.98% | 22.91% | 61.79% | 12.89% | — | |
| Synopsys Inc. | — | 154.48% | 7.85% | 13.85% | 5.01% | 0.36% | |
| Workday Inc. | 28.83% | 20.74% | 28.44% | -11.24% | 55.93% | — | |
| Balance-Sheet-Based Accruals Ratio, Sector | |||||||
| Software & Services | 0.00% | 21.94% | 26.16% | 18.26% | 29.59% | — | |
| Balance-Sheet-Based Accruals Ratio, Industry | |||||||
| Information Technology | 0.00% | 14.51% | 21.35% | 8.92% | 18.19% | — | |
Based on: 10-K (reporting date: 2026-01-31), 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31).
1 2026 Calculation
Net operating assets = Operating assets – Operating liabilities
= 5,856,559 – 5,868,608 = -12,049
2 2026 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2026 – Net operating assets2025
= -12,049 – -260,395 = 248,346
3 2026 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × 248,346 ÷ [(-12,049 + -260,395) ÷ 2] = —
4 Click competitor name to see calculations.
The relationship between net operating assets and balance-sheet-based aggregate accruals exhibits considerable fluctuation over the observed period. Net operating assets consistently demonstrate negative values, though the magnitude decreases significantly from 2022 to 2026. Aggregate accruals initially increase in absolute value, become negative in 2023, and then return to positive values, increasing substantially through 2026.
- Net Operating Assets
- Net operating assets begin at -219,473 (in thousands of US dollars) on January 31, 2022, and decrease to -476,930 by January 31, 2023. A subsequent increase is observed, reaching -395,077 on January 31, 2024, and further improving to -260,395 on January 31, 2025. By January 31, 2026, net operating assets are significantly reduced to -12,049, indicating a substantial shift towards asset recovery or reduced operational investment.
- Balance-Sheet-Based Aggregate Accruals
- Balance-sheet-based aggregate accruals are 89,232 on January 31, 2022. These accruals then experience a substantial decline, becoming negative at -257,457 on January 31, 2023. A reversal occurs in subsequent years, with accruals rising to 81,853 on January 31, 2024, 134,682 on January 31, 2025, and reaching 248,346 on January 31, 2026. This pattern suggests a cyclical relationship between accruals and net operating assets, potentially reflecting changes in working capital management or revenue recognition practices.
- Balance-Sheet-Based Accruals Ratio
- The balance-sheet-based accruals ratio is not populated for any of the observed dates. Without this ratio, a direct assessment of the quality of reported earnings based on accruals is not possible. Calculation of this ratio, defined as balance-sheet-based aggregate accruals divided by net operating assets, would provide insight into the extent to which reported earnings are supported by underlying cash flows. The absence of this metric limits the ability to evaluate potential earnings manipulation or the sustainability of reported performance.
The observed trends suggest a dynamic interplay between operational performance and accrual accounting. The significant changes in both net operating assets and aggregate accruals warrant further investigation to understand the underlying drivers and assess the potential impact on the reliability of reported financial results. The lack of the accruals ratio hinders a complete assessment of financial reporting quality.
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Cash-Flow-Statement-Based Accruals Ratio
CrowdStrike Holdings Inc., cash flow statement computation of aggregate accruals
US$ in thousands
| Jan 31, 2026 | Jan 31, 2025 | Jan 31, 2024 | Jan 31, 2023 | Jan 31, 2022 | Jan 31, 2021 | ||
|---|---|---|---|---|---|---|---|
| Net income (loss) attributable to CrowdStrike | (162,502) | (19,271) | 89,327) | (183,245) | (234,802) | (92,629) | |
| Less: Net cash provided by operating activities | 1,612,349) | 1,381,727) | 1,166,207) | 941,007) | 574,784) | 356,566) | |
| Less: Net cash (used in) provided by investing activities | (764,479) | (536,588) | (340,650) | (556,658) | (564,516) | 495,427) | |
| Cash-flow-statement-based aggregate accruals | (1,010,372) | (864,410) | (736,230) | (567,594) | (245,070) | (944,622) | |
| Financial Ratio | |||||||
| Cash-flow-statement-based accruals ratio1 | — | — | — | — | — | — | |
| Benchmarks | |||||||
| Cash-Flow-Statement-Based Accruals Ratio, Competitors2 | |||||||
| Accenture PLC | — | -6.95% | 24.31% | -0.19% | 11.87% | 11.80% | |
| Adobe Inc. | — | -14.85% | -21.90% | -21.73% | -19.93% | 9.21% | |
| AppLovin Corp. | — | -27.29% | -10.24% | -15.40% | 22.07% | — | |
| Cadence Design Systems Inc. | — | -3.48% | 17.36% | 3.78% | 15.03% | — | |
| Datadog Inc. | — | 206.67% | 30.92% | 53.36% | -34.44% | — | |
| International Business Machines Corp. | — | 10.47% | -3.73% | 0.99% | -7.22% | — | |
| Intuit Inc. | — | -0.10% | -8.44% | -8.74% | 25.60% | 58.72% | |
| Microsoft Corp. | — | 12.55% | 30.89% | 5.22% | 13.42% | 17.68% | |
| Oracle Corp. | — | 13.98% | -1.01% | 42.79% | -30.58% | 25.81% | |
| Palantir Technologies Inc. | — | 2,593.23% | — | — | — | — | |
| Palo Alto Networks Inc. | — | -8.91% | 33.84% | -37.95% | -196.64% | -68.30% | |
| Salesforce Inc. | 1.74% | -6.66% | -8.44% | -8.49% | 21.96% | — | |
| ServiceNow Inc. | — | -29.72% | -7.12% | 15.44% | 8.80% | — | |
| Synopsys Inc. | — | 71.60% | -7.64% | 0.20% | -4.64% | -4.88% | |
| Workday Inc. | -55.17% | -4.25% | 34.56% | 18.64% | -0.65% | — | |
| Cash-Flow-Statement-Based Accruals Ratio, Sector | |||||||
| Software & Services | 0.00% | 10.41% | 11.97% | 7.19% | 2.21% | — | |
| Cash-Flow-Statement-Based Accruals Ratio, Industry | |||||||
| Information Technology | 0.00% | 6.09% | 6.25% | 1.40% | 2.99% | — | |
Based on: 10-K (reporting date: 2026-01-31), 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31).
1 2026 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × -1,010,372 ÷ [(-12,049 + -260,395) ÷ 2] = —
2 Click competitor name to see calculations.
Net operating assets demonstrate a fluctuating pattern over the observed period. Initially, a substantial increase in negative net operating assets is noted, moving from -219,473 to -476,930 between 2022 and 2023. This is followed by a decrease in magnitude to -395,077 in 2024, and a further reduction to -260,395 in 2025. By 2026, the negative value significantly diminishes to -12,049.
Cash-flow-statement-based aggregate accruals consistently exhibit negative values and a pronounced upward trend in magnitude throughout the period. Starting at -245,070 in 2022, these accruals decrease to -567,594 in 2023, then to -736,230 in 2024. The decline continues with values of -864,410 in 2025 and -1,010,372 in 2026.
- Cash-flow-statement-based accruals ratio
- Values for the cash-flow-statement-based accruals ratio are not present in the provided information. Consequently, an assessment of this ratio and its trends is not possible.
The divergence between net operating assets and cash-flow-statement-based aggregate accruals is noteworthy. While net operating assets show a decreasing negative balance in later years, aggregate accruals continue to become more negative. This suggests a growing reliance on non-cash activities to fund operations, or potentially, a more aggressive recognition of expenses relative to cash inflows. Further investigation into the components of these accruals would be necessary to determine the underlying drivers of this trend.
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