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, 2025 | Jan 31, 2024 | Jan 31, 2023 | Jan 31, 2022 | Jan 31, 2021 | Jan 31, 2020 | ||
|---|---|---|---|---|---|---|---|
| Operating Assets | |||||||
| Total assets | 8,701,578) | 6,646,520) | 5,026,540) | 3,618,381) | 2,732,533) | 1,404,906) | |
| Less: Cash and cash equivalents | 4,323,295) | 3,375,069) | 2,455,369) | 1,996,633) | 1,918,608) | 264,798) | |
| Less: Short-term investments | —) | 99,591) | 250,000) | —) | —) | 647,266) | |
| Operating assets | 4,378,283) | 3,171,860) | 2,321,171) | 1,621,748) | 813,925) | 492,842) | |
| Operating Liabilities | |||||||
| Total liabilities | 5,382,661) | 4,309,431) | 3,539,106) | 2,580,738) | 1,860,659) | 662,299) | |
| Less: Long-term debt | 743,983) | 742,494) | 741,005) | 739,517) | 738,029) | —) | |
| Operating liabilities | 4,638,678) | 3,566,937) | 2,798,101) | 1,841,221) | 1,122,630) | 662,299) | |
| Net operating assets1 | (260,395) | (395,077) | (476,930) | (219,473) | (308,705) | (169,457) | |
| Balance-sheet-based aggregate accruals2 | 134,682) | 81,853) | (257,457) | 89,232) | (139,248) | —) | |
| Financial Ratio | |||||||
| Balance-sheet-based accruals ratio3 | — | — | — | — | — | — | |
| Benchmarks | |||||||
| Balance-Sheet-Based Accruals Ratio, Competitors4 | |||||||
| Accenture PLC | — | 35.69% | 16.32% | 21.70% | 27.93% | 3.73% | |
| Adobe Inc. | — | -3.83% | 1.85% | -8.24% | 14.14% | 8.20% | |
| Cadence Design Systems Inc. | — | 39.84% | 11.17% | 26.65% | 4.43% | — | |
| Fair Isaac Corp. | — | 6.46% | 12.11% | -3.66% | -6.17% | -0.02% | |
| International Business Machines Corp. | — | 2.79% | 2.42% | 1.55% | -7.39% | — | |
| Intuit Inc. | — | 3.35% | -1.74% | 85.68% | 139.73% | -1.39% | |
| Microsoft Corp. | — | 52.18% | 22.96% | 42.27% | 40.52% | 14.41% | |
| Oracle Corp. | 20.79% | 4.30% | 51.77% | 9.90% | 5.62% | — | |
| Palantir Technologies Inc. | — | — | — | — | — | — | |
| Palo Alto Networks Inc. | — | 89.91% | 137.01% | -124.73% | 85.21% | 69.06% | |
| Salesforce Inc. | 0.71% | -2.46% | -2.30% | 57.74% | 10.87% | — | |
| ServiceNow Inc. | — | 22.91% | 61.79% | 12.89% | 34.89% | — | |
| Synopsys Inc. | — | 7.85% | 13.85% | 5.01% | 0.36% | 8.40% | |
| Workday Inc. | 20.74% | 28.44% | -11.24% | 55.93% | -15.99% | — | |
| Balance-Sheet-Based Accruals Ratio, Sector | |||||||
| Software & Services | 0.00% | 26.35% | 18.48% | 29.42% | 16.66% | — | |
| Balance-Sheet-Based Accruals Ratio, Industry | |||||||
| Information Technology | 0.00% | 21.42% | 8.98% | 18.09% | 19.16% | — | |
Based on: 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), 10-K (reporting date: 2020-01-31).
1 2025 Calculation
Net operating assets = Operating assets – Operating liabilities
= 4,378,283 – 4,638,678 = -260,395
2 2025 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2025 – Net operating assets2024
= -260,395 – -395,077 = 134,682
3 2025 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × 134,682 ÷ [(-260,395 + -395,077) ÷ 2] = —
4 Click competitor name to see calculations.
- Net Operating Assets
- The net operating assets displayed a fluctuating trend over the observed period. Initially, there was a decrease in the negative value from -308,705 thousand US dollars in 2021 to -219,473 thousand US dollars in 2022, indicating an improvement or reduction in net operating liabilities. However, this trend reversed in 2023 with a substantial decline reaching -476,930 thousand US dollars. Subsequent years saw partial recoveries with the value moving to -395,077 thousand US dollars in 2024 and further improving to -260,395 thousand US dollars in 2025. Despite the improvements, net operating assets remained negative throughout, revealing consistent net operating liabilities.
- Balance-sheet-based Aggregate Accruals
- The balance-sheet-based aggregate accruals demonstrated a volatile pattern. In 2021, the figure was negative at -139,248 thousand US dollars, but it turned positive in 2022 to 89,232 thousand US dollars. This was followed by another significant negative movement in 2023 where accruals dropped to -257,457 thousand US dollars. The last two years indicated a return to positive figures, with accruals recorded at 81,853 thousand US dollars in 2024 and increasing further to 134,682 thousand US dollars in 2025. These fluctuations suggest inconsistent earnings quality in terms of accruals, which could point to varying management of accrual components or changes in accounting estimates.
- Balance-sheet-based Accruals Ratio
- Data for the balance-sheet-based accruals ratio is not available for the periods reviewed, limiting the ability to directly assess the proportional relationship between accruals and net operating assets or total assets. The absence of these values restricts the evaluation of the intensity of accruals relative to the size of the balance sheet components.
Cash-Flow-Statement-Based Accruals Ratio
CrowdStrike Holdings Inc., cash flow statement computation of aggregate accruals
US$ in thousands
| Jan 31, 2025 | Jan 31, 2024 | Jan 31, 2023 | Jan 31, 2022 | Jan 31, 2021 | Jan 31, 2020 | ||
|---|---|---|---|---|---|---|---|
| Net income (loss) attributable to CrowdStrike | (19,271) | 89,327) | (183,245) | (234,802) | (92,629) | (141,779) | |
| Less: Net cash provided by operating activities | 1,381,727) | 1,166,207) | 941,007) | 574,784) | 356,566) | 99,943) | |
| Less: Net cash (used in) provided by investing activities | (536,588) | (340,650) | (556,658) | (564,516) | 495,427) | (629,631) | |
| Cash-flow-statement-based aggregate accruals | (864,410) | (736,230) | (567,594) | (245,070) | (944,622) | 387,909) | |
| Financial Ratio | |||||||
| Cash-flow-statement-based accruals ratio1 | — | — | — | — | — | — | |
| Benchmarks | |||||||
| Cash-Flow-Statement-Based Accruals Ratio, Competitors2 | |||||||
| Accenture PLC | — | 24.31% | -0.19% | 11.87% | 11.80% | -13.65% | |
| Adobe Inc. | — | -21.90% | -21.73% | -19.93% | 9.21% | -0.48% | |
| Cadence Design Systems Inc. | — | 17.36% | 3.78% | 15.03% | -5.75% | — | |
| Fair Isaac Corp. | — | -8.60% | -2.41% | -13.92% | -17.25% | -10.25% | |
| International Business Machines Corp. | — | -3.73% | 0.99% | -7.22% | -1.64% | — | |
| Intuit Inc. | — | -8.44% | -8.74% | 25.60% | 58.72% | -34.22% | |
| Microsoft Corp. | — | 30.89% | 5.22% | 13.42% | 17.68% | -8.19% | |
| Oracle Corp. | 13.98% | -1.01% | 42.79% | -30.58% | 25.81% | — | |
| Palantir Technologies Inc. | — | — | — | — | — | — | |
| Palo Alto Networks Inc. | — | 33.84% | -37.95% | -196.64% | -68.30% | -488.47% | |
| Salesforce Inc. | -6.66% | -8.44% | -8.49% | 21.96% | 10.57% | — | |
| ServiceNow Inc. | — | -7.12% | 15.44% | 8.80% | -21.14% | — | |
| Synopsys Inc. | — | -7.64% | 0.20% | -4.64% | -4.88% | 0.92% | |
| Workday Inc. | -4.25% | 34.56% | 18.64% | -0.65% | -18.51% | — | |
| Cash-Flow-Statement-Based Accruals Ratio, Sector | |||||||
| Software & Services | 0.00% | 12.10% | 7.37% | 1.97% | 11.15% | — | |
| Cash-Flow-Statement-Based Accruals Ratio, Industry | |||||||
| Information Technology | 0.00% | 6.29% | 1.46% | 2.91% | 8.62% | — | |
Based on: 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), 10-K (reporting date: 2020-01-31).
1 2025 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × -864,410 ÷ [(-260,395 + -395,077) ÷ 2] = —
2 Click competitor name to see calculations.
- Net Operating Assets
- The net operating assets demonstrate a fluctuating trend over the five-year period. Initially, there is a reduction in the negative value from -308,705 thousand US dollars in January 31, 2021, to -219,473 thousand US dollars in January 31, 2022, indicating an improvement in net operating asset position. However, the figure declines significantly again in January 31, 2023 to -476,930 thousand US dollars, suggesting a considerable deterioration. This is followed by a moderate recovery to -395,077 thousand US dollars in January 31, 2024 and a further improvement by January 31, 2025 to -260,395 thousand US dollars. Overall, the data reflects strong volatility with a general trend of decreasing negativity towards the most recent period.
- Cash-flow-statement-based Aggregate Accruals
- This metric exhibits a primarily negative and volatile pattern across the years. Starting at a high negative value of -944,622 thousand US dollars in January 31, 2021, it sharply improves by January 31, 2022 to -245,070 thousand US dollars. Nonetheless, it deteriorates again significantly in subsequent years, oscillating between sizeable negative values: -567,594 thousand in 2023 and -736,230 thousand in 2024, culminating in the largest negative figure within the span at -864,410 thousand US dollars in January 31, 2025. These fluctuations indicate variability in accruals related to cash flow operations without a clear advancing trend towards stability.
- Cash-flow-statement-based Accruals Ratio
- Data for the cash-flow-statement-based accruals ratio is not provided, resulting in no observable trend or insights from this measure.