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Microsoft Excel LibreOffice Calc


Financial Reporting Quality: Aggregate Accruals

Difficulty: Advanced

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

Accenture PLC, balance sheet computation of aggregate accruals

USD $ in thousands

Microsoft Excel LibreOffice Calc
Aug 31, 2018 Aug 31, 2017 Aug 31, 2016 Aug 31, 2015 Aug 31, 2014 Aug 31, 2013
Operating Assets
Total assets hidden hidden hidden hidden hidden hidden
Less: Cash and cash equivalents hidden hidden hidden hidden hidden hidden
Less: Short-term investments hidden hidden hidden hidden hidden hidden
Operating assets hidden hidden hidden hidden hidden hidden
Operating Liabilities
Total liabilities hidden hidden hidden hidden hidden hidden
Less: Current portion of long-term debt and bank borrowings hidden hidden hidden hidden hidden hidden
Less: Long-term debt, excluding current portion hidden hidden hidden hidden hidden hidden
Operating liabilities hidden hidden hidden hidden hidden hidden
Net operating assets1 hidden hidden hidden hidden hidden hidden
Balance-sheet-based aggregate accruals2 hidden hidden hidden hidden hidden hidden
Ratio
Balance-sheet-based accruals ratio3 hidden hidden hidden hidden hidden hidden
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors
Automatic Data Processing Inc. hidden hidden hidden hidden hidden hidden
Balance-Sheet-Based Accruals Ratio, Sector
Support Services hidden hidden hidden hidden hidden hidden
Balance-Sheet-Based Accruals Ratio, Industry
Industrials hidden hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2018-10-24), 10-K (filing date: 2017-10-26), 10-K (filing date: 2016-10-28), 10-K (filing date: 2015-10-30), 10-K (filing date: 2014-10-24), 10-K (filing date: 2013-10-29).

2018 Calculations

1 Net operating assets = Operating assets – Operating liabilities
= hiddenhidden = hidden

2 Balance-sheet-based aggregate accruals = Net operating assets 2018 – Net operating assets 2017
= hiddenhidden = hidden

3 Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × hidden ÷ [(hidden + hidden) ÷ 2] = hidden

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, Accenture PLC improved earnings quality from 2017 to 2018.

Cash-Flow-Statement-Based Accruals Ratio

Accenture PLC, cash flow statement computation of aggregate accruals

USD $ in thousands

Microsoft Excel LibreOffice Calc
Aug 31, 2018 Aug 31, 2017 Aug 31, 2016 Aug 31, 2015 Aug 31, 2014 Aug 31, 2013
Net income attributable to Accenture plc hidden hidden hidden hidden hidden hidden
Less: Net cash provided by operating activities hidden hidden hidden hidden hidden hidden
Less: Net cash used in investing activities hidden hidden hidden hidden hidden hidden
Cash-flow-statement-based aggregate accruals hidden hidden hidden hidden hidden hidden
Ratio
Cash-flow-statement-based accruals ratio1 hidden hidden hidden hidden hidden hidden
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors
Automatic Data Processing Inc. hidden hidden hidden hidden hidden hidden
Cash-Flow-Statement-Based Accruals Ratio, Sector
Support Services hidden hidden hidden hidden hidden hidden
Cash-Flow-Statement-Based Accruals Ratio, Industry
Industrials hidden hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2018-10-24), 10-K (filing date: 2017-10-26), 10-K (filing date: 2016-10-28), 10-K (filing date: 2015-10-30), 10-K (filing date: 2014-10-24), 10-K (filing date: 2013-10-29).

2018 Calculations

1 Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × hidden ÷ [(hidden + hidden) ÷ 2] = hidden

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, Accenture PLC improved earnings quality from 2017 to 2018.