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

Chevron Corp. (NYSE:CVX)

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

Chevron Corp., 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 237,428  253,863  253,806  260,078  266,103 
Less: Cash and cash equivalents 5,686  9,342  4,813  6,988  11,022 
Less: Time deposits —  950  —  —  — 
Less: Marketable securities 63  53  13  310 
Operating assets 231,679  243,518  248,984  253,077  254,771 
Operating Liabilities
Total liabilities 92,220  98,221  104,487  113,356  112,217 
Less: Short-term debt 3,282  5,726  5,192  10,840  4,928 
Less: Long-term debt, excluding debt due within one year 23,691  28,733  33,571  35,286  33,664 
Operating liabilities 65,247  63,762  65,724  67,230  73,625 
 
Net operating assets1 166,432  179,756  183,260  185,847  181,146 
Balance-sheet-based aggregate accruals2 (13,324) (3,504) (2,587) 4,701 
Financial Ratio
Balance-sheet-based accruals ratio3 -7.70% -1.93% -1.40% 2.56%
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
ConocoPhillips 0.79% -2.51% -37.15% -6.18%
Exxon Mobil Corp. 3.99% -0.16% 9.28% 0.54%
Balance-Sheet-Based Accruals Ratio, Sector
Oil & Gas Producers -0.78% -1.07% -0.06% 0.46%

Based on: 10-K (filing date: 2020-02-21), 10-K (filing date: 2019-02-22), 10-K (filing date: 2018-02-22), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-25).

1 2019 Calculation
Net operating assets = Operating assets – Operating liabilities
= 231,67965,247 = 166,432

2 2019 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2019 – Net operating assets2018
= 166,432179,756 = -13,324

3 2019 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × -13,324 ÷ [(166,432 + 179,756) ÷ 2] = -7.70%

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, Chevron Corp. deteriorated earnings quality from 2018 to 2019.

Cash-Flow-Statement-Based Accruals Ratio

Chevron Corp., cash flow statement 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
Net income (loss) attributable to Chevron Corporation 2,924  14,824  9,195  (497) 4,587 
Less: Net cash provided by operating activities 27,314  30,618  20,515  12,846  19,456 
Less: Net cash used for investing activities (11,458) (12,290) (8,201) (16,852) (23,808)
Cash-flow-statement-based aggregate accruals (12,932) (3,504) (3,119) 3,509  8,939 
Financial Ratio
Cash-flow-statement-based accruals ratio1 -7.47% -1.93% -1.69% 1.91%
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
ConocoPhillips 6.83% -7.10% -31.63% -6.85%
Exxon Mobil Corp. 3.24% 0.54% 2.41% -0.87%
Cash-Flow-Statement-Based Accruals Ratio, Sector
Oil & Gas Producers -0.56% -1.11% -2.94% -0.55%

Based on: 10-K (filing date: 2020-02-21), 10-K (filing date: 2019-02-22), 10-K (filing date: 2018-02-22), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-25).

1 2019 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × -12,932 ÷ [(166,432 + 179,756) ÷ 2] = -7.47%

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, Chevron Corp. deteriorated earnings quality from 2018 to 2019.