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Microsoft Excel LibreOffice Calc

EOG Resources Inc. (NYSE:EOG)


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

EOG Resources Inc., balance sheet computation of aggregate accruals

US$ in thousands

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Operating Assets
Total assets 37,124,608  33,934,474  29,833,078  29,459,433  26,975,244 
Less: Cash and cash equivalents 2,027,972  1,555,634  834,228  1,599,895  718,506 
Operating assets 35,096,636  32,378,840  28,998,850  27,859,538  26,256,738 
Operating Liabilities
Total liabilities 15,483,892  14,570,286  13,549,805  15,477,852  14,032,209 
Less: Current portion of long-term debt 1,014,524  913,093  356,235  6,579  6,579 
Less: Long-term debt, excluding current portion 4,160,919  5,170,169  6,030,836  6,979,779  6,653,685 
Operating liabilities 10,308,449  8,487,024  7,162,734  8,491,494  7,371,945 
 
Net operating assets1 24,788,187  23,891,816  21,836,116  19,368,044  18,884,793 
Balance-sheet-based aggregate accruals2 896,371  2,055,700  2,468,072  483,251 
Financial Ratio
Balance-sheet-based accruals ratio3 3.68% 8.99% 11.98% 2.53%
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
Chevron Corp. -7.70% -1.93% -1.40% 2.56%
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%
Balance-Sheet-Based Accruals Ratio, Industry
Oil & Gas -0.88% -1.58% -0.32% -0.41%

Based on: 10-K (filing date: 2020-02-27), 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-27), 10-K (filing date: 2017-02-27), 10-K (filing date: 2016-02-25).

1 2019 Calculation
Net operating assets = Operating assets – Operating liabilities
= 35,096,63610,308,449 = 24,788,187

2 2019 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2019 – Net operating assets2018
= 24,788,18723,891,816 = 896,371

3 2019 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × 896,371 ÷ [(24,788,187 + 23,891,816) ÷ 2] = 3.68%

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, EOG Resources Inc. improved earnings quality from 2018 to 2019.

Cash-Flow-Statement-Based Accruals Ratio

EOG Resources Inc., cash flow statement computation of aggregate accruals

US$ in thousands

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Net income (loss) 2,734,910  3,419,040  2,582,579  (1,096,686) (4,524,515)
Less: Net cash provided by operating activities 8,163,180  7,768,608  4,265,336  2,359,063  3,595,165 
Less: Net cash used in investing activities (6,177,173) (6,170,162) (3,987,409) (1,252,944) (5,320,256)
Cash-flow-statement-based aggregate accruals 748,903  1,820,594  2,304,652  (2,202,805) (2,799,424)
Financial Ratio
Cash-flow-statement-based accruals ratio1 3.08% 7.96% 11.19% -11.52%
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
Chevron Corp. -7.47% -1.93% -1.69% 1.91%
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%
Cash-Flow-Statement-Based Accruals Ratio, Industry
Oil & Gas -0.65% -1.60% -2.73% -0.91%

Based on: 10-K (filing date: 2020-02-27), 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-27), 10-K (filing date: 2017-02-27), 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 × 748,903 ÷ [(24,788,187 + 23,891,816) ÷ 2] = 3.08%

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, EOG Resources Inc. improved earnings quality from 2018 to 2019.