Stock Analysis on Net

Colgate-Palmolive Co. (NYSE:CL)

This company has been moved to the archive! The financial data has not been updated since July 28, 2023.

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

Colgate-Palmolive Co., balance sheet computation of aggregate accruals

US$ in millions

Microsoft Excel
Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018
Operating Assets
Total assets 15,731 15,040 15,920 15,034 12,161
Less: Cash and cash equivalents 775 832 888 883 726
Operating assets 14,956 14,208 15,032 14,151 11,435
Operating Liabilities
Total liabilities 14,925 14,069 14,819 14,476 11,964
Less: Notes and loans payable 11 39 258 260 12
Less: Current portion of long-term debt 14 12 9 254
Less: Long-term debt, excluding current portion 8,741 7,194 7,334 7,333 6,354
Operating liabilities 6,159 6,824 7,218 6,629 5,598
 
Net operating assets1 8,797 7,384 7,814 7,522 5,837
Balance-sheet-based aggregate accruals2 1,413 (430) 292 1,685
Financial Ratio
Balance-sheet-based accruals ratio3 17.46% -5.66% 3.81% 25.23%
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
Procter & Gamble Co. 3.98% 4.39% -2.96% -7.06%
Balance-Sheet-Based Accruals Ratio, Industry
Consumer Staples 3.17% -0.53% 0.46% 200.00%

Based on: 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), 10-K (reporting date: 2018-12-31).

1 2022 Calculation
Net operating assets = Operating assets – Operating liabilities
= 14,9566,159 = 8,797

2 2022 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2022 – Net operating assets2021
= 8,7977,384 = 1,413

3 2022 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × 1,413 ÷ [(8,797 + 7,384) ÷ 2] = 17.46%

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, Colgate-Palmolive Co. deteriorated earnings quality from 2021 to 2022.

Cash-Flow-Statement-Based Accruals Ratio

Colgate-Palmolive Co., cash flow statement computation of aggregate accruals

US$ in millions

Microsoft Excel
Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018
Net income attributable to Colgate-Palmolive Company 1,785 2,166 2,695 2,367 2,400
Less: Net cash provided by operations 2,556 3,325 3,719 3,133 3,056
Less: Net cash used in investing activities (1,601) (592) (779) (2,099) (1,170)
Cash-flow-statement-based aggregate accruals 830 (567) (245) 1,333 514
Financial Ratio
Cash-flow-statement-based accruals ratio1 10.26% -7.46% -3.20% 19.96%
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
Procter & Gamble Co. 3.50% -1.84% -11.18% -11.25%
Cash-Flow-Statement-Based Accruals Ratio, Industry
Consumer Staples 1.41% -4.95% -1.05% 1.64%

Based on: 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), 10-K (reporting date: 2018-12-31).

1 2022 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × 830 ÷ [(8,797 + 7,384) ÷ 2] = 10.26%

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, Colgate-Palmolive Co. deteriorated earnings quality from 2021 to 2022.