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
Take-Two Interactive Software Inc., balance sheet computation of aggregate accruals
US$ in thousands
| Mar 31, 2025 | Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|
| Operating Assets | |||||||
| Total assets | 9,180,700) | 12,216,900) | 15,862,100) | 6,546,219) | 6,028,218) | 4,948,832) | |
| Less: Cash and cash equivalents | 1,456,100) | 754,000) | 827,400) | 1,732,047) | 1,422,884) | 1,357,664) | |
| Less: Short-term investments | 9,400) | 22,000) | 187,000) | 820,060) | 1,308,692) | 644,003) | |
| Less: Restricted cash and cash equivalents | 14,900) | 252,100) | 307,600) | 359,832) | 538,822) | 546,604) | |
| Operating assets | 7,700,300) | 11,188,800) | 14,540,100) | 3,634,280) | 2,757,820) | 2,400,561) | |
| Operating Liabilities | |||||||
| Total liabilities | 7,043,000) | 6,549,000) | 6,819,600) | 2,736,560) | 2,696,326) | 2,409,588) | |
| Less: Short-term debt, net | 1,148,500) | 24,600) | 1,346,800) | —) | —) | —) | |
| Less: Long-term debt, net | 2,512,600) | 3,058,300) | 1,733,000) | —) | —) | —) | |
| Operating liabilities | 3,381,900) | 3,466,100) | 3,739,800) | 2,736,560) | 2,696,326) | 2,409,588) | |
| Net operating assets1 | 4,318,400) | 7,722,700) | 10,800,300) | 897,720) | 61,494) | (9,027) | |
| Balance-sheet-based aggregate accruals2 | (3,404,300) | (3,077,600) | 9,902,580) | 836,226) | 70,521) | —) | |
| Financial Ratio | |||||||
| Balance-sheet-based accruals ratio3 | -56.54% | -33.23% | 169.30% | 174.36% | 268.82% | — | |
| Benchmarks | |||||||
| Balance-Sheet-Based Accruals Ratio, Competitors4 | |||||||
| Alphabet Inc. | — | 26.92% | 17.24% | 21.43% | 22.86% | — | |
| Comcast Corp. | — | 2.10% | 1.29% | -6.76% | -0.48% | — | |
| Meta Platforms Inc. | — | 22.82% | 11.12% | 20.95% | 14.69% | — | |
| Netflix Inc. | — | 9.36% | -3.78% | 14.21% | 27.24% | — | |
| Walt Disney Co. | — | 0.01% | 0.08% | 3.09% | 1.73% | -4.26% | |
| Balance-Sheet-Based Accruals Ratio, Sector | |||||||
| Media & Entertainment | 0.00% | 12.78% | 8.32% | 7.91% | 8.32% | — | |
| Balance-Sheet-Based Accruals Ratio, Industry | |||||||
| Communication Services | 0.00% | 5.86% | 5.03% | -3.70% | 10.24% | — | |
Based on: 10-K (reporting date: 2025-03-31), 10-K (reporting date: 2024-03-31), 10-K (reporting date: 2023-03-31), 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31).
1 2025 Calculation
Net operating assets = Operating assets – Operating liabilities
= 7,700,300 – 3,381,900 = 4,318,400
2 2025 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2025 – Net operating assets2024
= 4,318,400 – 7,722,700 = -3,404,300
3 2025 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × -3,404,300 ÷ [(4,318,400 + 7,722,700) ÷ 2] = -56.54%
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, Take-Two Interactive Software Inc. deteriorated earnings quality from 2024 to 2025. |
Cash-Flow-Statement-Based Accruals Ratio
Take-Two Interactive Software Inc., cash flow statement computation of aggregate accruals
US$ in thousands
| Mar 31, 2025 | Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|
| Net income (loss) | (4,478,900) | (3,744,200) | (1,124,700) | 418,022) | 588,886) | 404,459) | |
| Less: Net cash provided by (used in) operating activities | (45,200) | (16,100) | 1,100) | 257,984) | 912,318) | 685,678) | |
| Less: Net cash (used in) provided by investing activities | (151,500) | (28,200) | (2,876,300) | 139,216) | (806,724) | 4,049) | |
| Cash-flow-statement-based aggregate accruals | (4,282,200) | (3,699,900) | 1,750,500) | 20,822) | 483,292) | (285,268) | |
| Financial Ratio | |||||||
| Cash-flow-statement-based accruals ratio1 | -71.13% | -39.95% | 29.93% | 4.34% | 1,842.27% | — | |
| Benchmarks | |||||||
| Cash-Flow-Statement-Based Accruals Ratio, Competitors2 | |||||||
| Alphabet Inc. | — | 9.42% | -0.52% | -7.90% | 17.48% | — | |
| Comcast Corp. | — | 2.38% | -3.44% | -3.88% | -0.83% | — | |
| Meta Platforms Inc. | — | 15.08% | -7.43% | 1.96% | -14.89% | — | |
| Netflix Inc. | — | 12.03% | -8.44% | 16.73% | 27.32% | — | |
| Walt Disney Co. | — | -1.46% | -1.97% | 1.50% | -0.29% | -4.68% | |
| Cash-Flow-Statement-Based Accruals Ratio, Sector | |||||||
| Media & Entertainment | 0.00% | 5.80% | -2.86% | -1.68% | 2.58% | — | |
| Cash-Flow-Statement-Based Accruals Ratio, Industry | |||||||
| Communication Services | 0.00% | 2.08% | -2.32% | -1.31% | 6.83% | — | |
Based on: 10-K (reporting date: 2025-03-31), 10-K (reporting date: 2024-03-31), 10-K (reporting date: 2023-03-31), 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31).
1 2025 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × -4,282,200 ÷ [(4,318,400 + 7,722,700) ÷ 2] = -71.13%
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, Take-Two Interactive Software Inc. deteriorated earnings quality from 2024 to 2025. |