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

Mondelēz International Inc. (NASDAQ:MDLZ)

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

Mondelēz International Inc., balance sheet computation of aggregate accruals

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Operating Assets
Total assets 64,549  62,729  63,109  61,538  62,843 
Less: Cash and cash equivalents 1,291  1,100  761  1,741  1,870 
Operating assets 63,258  61,629  62,348  59,797  60,973 
Operating Liabilities
Total liabilities 37,198  37,016  36,918  36,323  34,743 
Less: Short-term borrowings 2,638  3,192  3,517  2,531  236 
Less: Current portion of long-term debt 1,581  2,648  1,163  1,451  605 
Less: Long-term debt, excluding current portion 14,207  12,532  12,972  13,217  14,557 
Operating liabilities 18,772  18,644  19,266  19,124  19,345 
 
Net operating assets1 44,486  42,985  43,082  40,673  41,628 
Balance-sheet-based aggregate accruals2 1,501  (97) 2,409  (955) —
Financial Ratio
Balance-sheet-based accruals ratio3 3.43% -0.23% 5.75% -2.32% —
Benchmarks
Balance-Sheet-Based Accruals Ratio, Industry
Consumer Goods 0.69% 4.92% 2.73% -0.74% —

Based on: 10-K (filing date: 2020-02-07), 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-09), 10-K (filing date: 2017-02-24), 10-K (filing date: 2016-02-19).

1 2019 Calculation
Net operating assets = Operating assets – Operating liabilities
= 63,258 – 18,772 = 44,486

2 2019 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2019 – Net operating assets2018
= 44,486 – 42,985 = 1,501

3 2019 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × 1,501 ÷ [(44,486 + 42,985) ÷ 2] = 3.43%

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, Mondelēz International Inc. deteriorated earnings quality from 2018 to 2019.

Cash-Flow-Statement-Based Accruals Ratio

Mondelēz International Inc., cash flow statement computation of aggregate accruals

US$ in millions

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Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Net earnings attributable to Mondelēz International 3,870  3,381  2,922  1,659  7,267 
Less: Net cash provided by operating activities 3,965  3,948  2,593  2,838  3,728 
Less: Net cash (used in) provided by investing activities (960) (1,224) (301) (1,029) 2,649 
Cash-flow-statement-based aggregate accruals 865  657  630  (150) 890 
Financial Ratio
Cash-flow-statement-based accruals ratio1 1.98% 1.53% 1.50% -0.36% —
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Industry
Consumer Goods -3.33% -1.05% 4.39% 3.97% —

Based on: 10-K (filing date: 2020-02-07), 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-09), 10-K (filing date: 2017-02-24), 10-K (filing date: 2016-02-19).

1 2019 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × 865 ÷ [(44,486 + 42,985) ÷ 2] = 1.98%

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, Mondelēz International Inc. deteriorated earnings quality from 2018 to 2019.