Twenty-First Century Fox Inc. (NASDAQ:FOX)

The annual financial reporting quality measures indicate notable variations and trends over the periods analyzed.

Net Operating Assets

The net operating assets demonstrate a fluctuating but generally stable trend across the five years. Starting at US$35,085 million in 2014, there is a decline to US$29,418 million in 2015, followed by a gradual increase over the subsequent years, reaching US$33,463 million by 2018. This pattern suggests an initial reduction in operating asset base with a recovery in the latter years.

Balance-Sheet-Based Aggregate Accruals

The aggregate accruals exhibit significant volatility. In 2014, the accruals were positive at US$4,642 million, shifting dramatically to a negative value of -US$5,667 million in 2015. This sharp reversal indicates a sizable change in accrued items. From 2016 onwards, accruals reverted to positive figures but at substantially lower amounts (US$1,316 million in 2016, US$648 million in 2017, and US$2,081 million in 2018), implying a moderation in accrual activities after the significant fluctuation in 2015.

Balance-Sheet-Based Accruals Ratio

The accruals ratio, expressed as a percentage of net operating assets, mirrors the variability seen in aggregate accruals. It began at 14.17% in 2014, dropped sharply to -17.57% in 2015, and then recovered to lower positive percentages in the following years: 4.38% in 2016, 2.09% in 2017, and 6.42% in 2018. This trajectory highlights a period of pronounced negative accrual adjustment followed by stabilization at moderate positive levels, suggesting changes in earnings quality and accrual behavior throughout the timeframe.

Overall, the data reveal a period of substantial fluctuations in accrual measures around 2015, with a return to more moderate accruals subsequently, while net operating assets showed an initial decline with partial recovery. These patterns may reflect shifts in operational management, accounting policies, or economic conditions influencing financial reporting quality.

The financial data over the five-year period reveals varying trends in net operating assets as well as in cash-flow-statement-based accruals and their ratios. The net operating assets show an initial decline followed by a gradual recovery and growth. Specifically, net operating assets decreased from 35,085 million US dollars in 2014 to 29,418 million in 2015, signaling a contraction in the asset base. Subsequently, a steady increase is observed in the following years, closing at 33,463 million in 2018, approaching the level recorded in 2014.

Cash-flow-statement-based aggregate accruals demonstrate significant volatility throughout the period. Starting with a positive figure of 2,485 million in 2014, there is a notable reversal to a negative accrual of -2,047 million in 2015. This indicates a shift in accrual patterns, possibly related to changes in working capital or non-cash expenses. Accruals rebounded to positive amounts in 2016 and 2018, with intermediate fluctuations including a record near zero in 2017 (-81 million). The oscillation suggests variability in earnings quality or timing differences between cash flows and accounting profits.

In terms of the cash-flow-statement-based accruals ratio, the data reveals a parallel pattern of fluctuation aligned with aggregate accruals. The ratio fell from a positive 7.58% in 2014 to a negative 6.35% in 2015, then rose again to positive figures of 4.47% in 2016 and 4.36% in 2018, with a near-zero dip (-0.26%) in 2017. These fluctuations indicate changes in the proportion of accruals relative to net operating assets, reflective of shifts in financial reporting dynamics and potentially affecting the assessment of earnings quality over the review period.