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Microsoft Excel LibreOffice Calc

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


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

Twenty-First Century Fox Inc., balance sheet computation of aggregate accruals

US$ in millions

Microsoft Excel LibreOffice Calc
Jun 30, 2018 Jun 30, 2017 Jun 30, 2016 Jun 30, 2015 Jun 30, 2014 Jun 30, 2013
Operating Assets
Total assets 53,831  50,724  48,365  50,051  54,793  50,944 
Less: Cash and cash equivalents 7,622  6,163  4,424  8,428  5,415  6,659 
Operating assets 46,209  44,561  43,941  41,623  49,378  44,285 
Operating Liabilities
Total liabilities 32,269  33,092  32,932  31,244  33,351  30,300 
Less: Current borrowings 1,054  457  427  244  799  137 
Less: Non-current borrowings 18,469  19,456  19,298  18,795  18,259  16,321 
Operating liabilities 12,746  13,179  13,207  12,205  14,293  13,842 
 
Net operating assets1 33,463  31,382  30,734  29,418  35,085  30,443 
Balance-sheet-based aggregate accruals2 2,081  648  1,316  (5,667) 4,642 
Financial Ratio
Balance-sheet-based accruals ratio3 6.42% 2.09% 4.38% -17.57% 14.17%
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
Charter Communications Inc. -0.51% 5.76% 102.44%
Comcast Corp. 31.76% 13.40% 8.91%
Netflix Inc. 47.69% 50.97% 61.45%
Walt Disney Co. 4.71% 6.97% 1.86% 3.50%
Balance-Sheet-Based Accruals Ratio, Sector
Media 16.19% 9.93% 35.29% 200.00%
Balance-Sheet-Based Accruals Ratio, Industry
Consumer Services 16.01% 7.32% 15.29% 200.00%

Based on: 10-K (filing date: 2018-08-13), 10-K (filing date: 2017-08-14), 10-K (filing date: 2016-08-11), 10-K (filing date: 2015-08-13), 10-K (filing date: 2014-08-14), 10-K (filing date: 2013-08-19).

1 2018 Calculation
Net operating assets = Operating assets – Operating liabilities
= 46,20912,746 = 33,463

2 2018 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2018 – Net operating assets2017
= 33,46331,382 = 2,081

3 2018 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × 2,081 ÷ [(33,463 + 31,382) ÷ 2] = 6.42%

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, Twenty-First Century Fox Inc. deteriorated earnings quality from 2017 to 2018.

Cash-Flow-Statement-Based Accruals Ratio

Twenty-First Century Fox Inc., cash flow statement computation of aggregate accruals

US$ in millions

Microsoft Excel LibreOffice Calc
Jun 30, 2018 Jun 30, 2017 Jun 30, 2016 Jun 30, 2015 Jun 30, 2014 Jun 30, 2013
Net income attributable to Twenty-First Century Fox, Inc. stockholders 4,464  2,952  2,755  8,306  4,514  7,097 
Less: Net cash provided by operating activities 4,227  3,785  3,048  3,617  2,964  3,002 
Less: Net cash (used in) provided by investing activities (1,177) (752) (1,638) 6,736  (935) 86 
Cash-flow-statement-based aggregate accruals 1,414  (81) 1,345  (2,047) 2,485  4,009 
Financial Ratio
Cash-flow-statement-based accruals ratio1 4.36% -0.26% 4.47% -6.35% 7.58%
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
Charter Communications Inc. -0.69% 5.30% 9.26%
Comcast Corp. 24.41% 12.14% 7.10%
Netflix Inc. 44.39% 39.94% 48.86%
Walt Disney Co. 5.27% 1.15% 3.11% 2.83%
Cash-Flow-Statement-Based Accruals Ratio, Sector
Media 12.88% 7.82% 7.29% 18.05%
Cash-Flow-Statement-Based Accruals Ratio, Industry
Consumer Services 7.02% 4.04% 1.93% 7.61%

Based on: 10-K (filing date: 2018-08-13), 10-K (filing date: 2017-08-14), 10-K (filing date: 2016-08-11), 10-K (filing date: 2015-08-13), 10-K (filing date: 2014-08-14), 10-K (filing date: 2013-08-19).

1 2018 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × 1,414 ÷ [(33,463 + 31,382) ÷ 2] = 4.36%

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, Twenty-First Century Fox Inc. deteriorated earnings quality from 2017 to 2018.