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

Micron Technology Inc. (NASDAQ:MU)

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

Micron Technology Inc., balance sheet computation of aggregate accruals

US$ in millions

Microsoft Excel LibreOffice Calc
Aug 29, 2019 Aug 30, 2018 Aug 31, 2017 Sep 1, 2016 Sep 3, 2015 Aug 28, 2014
Operating Assets
Total assets 48,887  43,376  35,336  27,540  24,143  22,498 
Less: Cash and equivalents 7,152  6,506  5,109  4,140  2,287  4,150 
Less: Short-term investments 803  296  319  258  1,234  384 
Operating assets 40,932  36,574  29,908  23,142  20,622  17,964 
Operating Liabilities
Total liabilities 12,019  10,112  15,845  14,612  10,855  10,868 
Less: Current debt 1,310  859  1,262  756  1,089  1,638 
Less: Long-term debt 4,541  3,777  9,872  9,154  6,252  4,955 
Operating liabilities 6,168  5,476  4,711  4,702  3,514  4,275 
 
Net operating assets1 34,764  31,098  25,197  18,440  17,108  13,689 
Balance-sheet-based aggregate accruals2 3,666  5,901  6,757  1,332  3,419 
Financial Ratio
Balance-sheet-based accruals ratio3 11.13% 20.96% 30.97% 7.49% 22.20%
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
Advanced Micro Devices Inc. 28.39% 49.43% 33.24% -57.87%
Analog Devices Inc. 0.29% -2.75% 142.61% -2.62%
Apple Inc. -45.28% -12.22% 16.94% 4.07% 15.49%
Applied Materials Inc. 19.87% 9.56% 7.98% -5.41% 7.76%
Broadcom Inc. 27.77% 29.77% -9.33% 130.30% -4.39%
Cisco Systems Inc. 11.05% -27.67% 10.35% 7.15%
Intel Corp. 4.20% 8.12% 9.37% 23.70%
Lam Research Corp. -6.77% 10.60% 0.89% -0.62%
NVIDIA Corp. 49.27% 28.14% 61.57% -23.52%
Qualcomm Inc. 48.90% -98.54% -47.48% -0.74% 14.83%
Texas Instruments Inc. -5.28% -1.17% -6.30% -2.39%
Balance-Sheet-Based Accruals Ratio, Sector
Technology Hardware & Equipment -7.52% -3.20% 12.59% 14.99% 200.00%
Balance-Sheet-Based Accruals Ratio, Industry
Technology 6.22% 2.01% 12.50% 10.58% 200.00%

Based on: 10-K (filing date: 2019-10-17), 10-K (filing date: 2018-10-15), 10-K (filing date: 2017-10-26), 10-K (filing date: 2016-10-28), 10-K (filing date: 2015-10-27), 10-K (filing date: 2014-10-27).

1 2019 Calculation
Net operating assets = Operating assets – Operating liabilities
= 40,9326,168 = 34,764

2 2019 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2019 – Net operating assets2018
= 34,76431,098 = 3,666

3 2019 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × 3,666 ÷ [(34,764 + 31,098) ÷ 2] = 11.13%

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, Micron Technology Inc. improved earnings quality from 2018 to 2019.

Cash-Flow-Statement-Based Accruals Ratio

Micron Technology Inc., cash flow statement computation of aggregate accruals

US$ in millions

Microsoft Excel LibreOffice Calc
Aug 29, 2019 Aug 30, 2018 Aug 31, 2017 Sep 1, 2016 Sep 3, 2015 Aug 28, 2014
Net income (loss) attributable to Micron 6,313  14,135  5,089  (276) 2,899  3,045 
Less: Net cash provided by operating activities 13,189  17,400  8,153  3,168  5,208  5,699 
Less: Net cash (used for) provided by investing activities (10,085) (8,216) (7,537) (3,068) (6,232) (2,453)
Cash-flow-statement-based aggregate accruals 3,209  4,951  4,473  (376) 3,923  (201)
Financial Ratio
Cash-flow-statement-based accruals ratio1 9.74% 17.59% 20.50% -2.12% 25.48%
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
Advanced Micro Devices Inc. -0.19% 43.37% 12.64% -103.39%
Analog Devices Inc. -3.61% -3.78% 62.93% 27.75%
Apple Inc. -47.40% -20.53% 19.28% 17.80% 21.52%
Applied Materials Inc. -1.09% -13.49% 33.14% -4.57% 7.15%
Broadcom Inc. 18.25% 23.21% -13.51% 23.89% -10.19%
Cisco Systems Inc. -80.97% -111.97% 6.18% 20.68%
Intel Corp. 2.52% 3.32% 4.12% 21.28%
Lam Research Corp. 16.67% -78.67% 47.67% -28.43%
NVIDIA Corp. 143.36% -83.66% 57.83% -15.08%
Qualcomm Inc. -30.37% -127.94% -102.91% 7.18% 14.30%
Texas Instruments Inc. 3.01% -15.48% -5.40% -3.44%
Cash-Flow-Statement-Based Accruals Ratio, Sector
Technology Hardware & Equipment -16.81% -17.25% 7.05% 15.20% 27.96%
Cash-Flow-Statement-Based Accruals Ratio, Industry
Technology -8.33% -12.73% 14.50% 15.81% 34.37%

Based on: 10-K (filing date: 2019-10-17), 10-K (filing date: 2018-10-15), 10-K (filing date: 2017-10-26), 10-K (filing date: 2016-10-28), 10-K (filing date: 2015-10-27), 10-K (filing date: 2014-10-27).

1 2019 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × 3,209 ÷ [(34,764 + 31,098) ÷ 2] = 9.74%

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, Micron Technology Inc. improved earnings quality from 2018 to 2019.