Stock Analysis on Net

Chevron Corp. (NYSE:CVX)

Financial Reporting Quality: Aggregate Accruals

Microsoft Excel

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
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Operating Assets
Total assets 261,632 257,709 239,535 239,790 237,428
Less: Cash and cash equivalents 8,178 17,678 5,640 5,596 5,686
Less: Marketable securities 45 223 35 31 63
Operating assets 253,409 239,808 233,860 234,163 231,679
Operating Liabilities
Total liabilities 99,703 97,467 99,595 107,064 92,220
Less: Short-term debt 529 1,964 256 1,548 3,282
Less: Long-term debt, excluding debt due within one year 20,307 21,375 31,113 42,767 23,691
Operating liabilities 78,867 74,128 68,226 62,749 65,247
 
Net operating assets1 174,542 165,680 165,634 171,414 166,432
Balance-sheet-based aggregate accruals2 8,862 46 (5,780) 4,982
Financial Ratio
Balance-sheet-based accruals ratio3 5.21% 0.03% -3.43% 2.95%
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
ConocoPhillips 10.61% -5.86% 44.50% -6.11%
Exxon Mobil Corp. 3.91% -1.19% -4.87% -6.54%
Marathon Petroleum Corp. -3.17% 3.53% -23.90% -13.70%
Occidental Petroleum Corp. -0.56% 3.65% -11.15% -27.81%
Pioneer Natural Resources Co. 4.98% 2.00% 62.10% -2.06%
Valero Energy Corp. 7.13% 8.66% -4.76% 4.56%
Balance-Sheet-Based Accruals Ratio, Sector
Oil, Gas & Consumable Fuels 4.21% 0.14% -0.49% -6.14%
Balance-Sheet-Based Accruals Ratio, Industry
Energy 4.34% 0.29% -0.47% -7.53%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

1 2023 Calculation
Net operating assets = Operating assets – Operating liabilities
= 253,40978,867 = 174,542

2 2023 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2023 – Net operating assets2022
= 174,542165,680 = 8,862

3 2023 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × 8,862 ÷ [(174,542 + 165,680) ÷ 2] = 5.21%

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 2022 to 2023.

Cash-Flow-Statement-Based Accruals Ratio

Chevron Corp., cash flow statement computation of aggregate accruals

US$ in millions

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Net income (loss) attributable to Chevron Corporation 21,369 35,465 15,625 (5,543) 2,924
Less: Net cash provided by operating activities 35,609 49,602 29,187 10,577 27,314
Less: Net cash used for investing activities (15,232) (12,108) (5,865) (6,965) (11,458)
Cash-flow-statement-based aggregate accruals 992 (2,029) (7,697) (9,155) (12,932)
Financial Ratio
Cash-flow-statement-based accruals ratio1 0.58% -1.22% -4.57% -5.42%
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
ConocoPhillips 5.11% -1.56% -0.78% -8.78%
Exxon Mobil Corp. -0.04% -2.93% -6.69% -7.93%
Marathon Petroleum Corp. -2.72% -4.94% 14.35% -11.70%
Occidental Petroleum Corp. -1.30% 2.84% -13.52% -29.21%
Pioneer Natural Resources Co. 4.22% 0.31% -15.35% -4.41%
Valero Energy Corp. 4.40% 5.69% -9.15% 0.18%
Cash-Flow-Statement-Based Accruals Ratio, Sector
Oil, Gas & Consumable Fuels 0.75% -1.43% -4.66% -9.34%
Cash-Flow-Statement-Based Accruals Ratio, Industry
Energy 0.77% -1.19% -4.76% -10.60%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

1 2023 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × 992 ÷ [(174,542 + 165,680) ÷ 2] = 0.58%

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. improved earnings quality from 2022 to 2023.