Stock Analysis on Net

Hess Corp. (NYSE:HES)

This company has been moved to the archive! The financial data has not been updated since November 2, 2023.

Financial Reporting Quality: Aggregate Accruals

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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

Hess Corp., balance sheet computation of aggregate accruals

US$ in millions

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Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018
Operating Assets
Total assets 21,695 20,515 18,821 21,782 21,433
Less: Cash and cash equivalents 2,486 2,713 1,739 1,545 2,694
Operating assets 19,209 17,802 17,082 20,237 18,739
Operating Liabilities
Total liabilities 13,199 13,489 12,486 12,076 10,545
Less: Current portion of long-term debt 3 517 10 67
Less: Current portion of finance lease obligations 21 19 18 17
Less: Long-term debt, excluding current portion 8,278 7,941 8,286 7,142 6,605
Less: Long-term finance lease obligations 179 200 220 238
Operating liabilities 4,718 4,812 3,952 4,679 3,873
 
Net operating assets1 14,491 12,990 13,130 15,558 14,866
Balance-sheet-based aggregate accruals2 1,501 (140) (2,428) 692
Financial Ratio
Balance-sheet-based accruals ratio3 10.92% -1.07% -16.93% 4.55%
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
Chevron Corp. 0.03% -3.43% 2.95%
ConocoPhillips -5.86% 44.50% -6.11%
Exxon Mobil Corp. -1.19% -4.87% -6.54%
Marathon Petroleum Corp. 3.53% -23.90% -13.70%
Occidental Petroleum Corp. 3.65% -11.15% -27.81%
Valero Energy Corp. 8.66% -4.76% 4.56%
Balance-Sheet-Based Accruals Ratio, Sector
Oil, Gas & Consumable Fuels 0.05% -2.67% -6.24% 200.00%
Balance-Sheet-Based Accruals Ratio, Industry
Energy 0.22% -2.56% -7.65% 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
= 19,2094,718 = 14,491

2 2022 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2022 – Net operating assets2021
= 14,49112,990 = 1,501

3 2022 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × 1,501 ÷ [(14,491 + 12,990) ÷ 2] = 10.92%

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, Hess Corp. deteriorated earnings quality from 2021 to 2022.

Cash-Flow-Statement-Based Accruals Ratio

Hess Corp., 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 (loss) attributable to Hess Corporation 2,096 559 (3,093) (408) (282)
Less: Net cash provided by operating activities 3,944 2,890 1,333 1,642 1,939
Less: Net cash used in investing activities (2,555) (1,325) (1,707) (2,843) (1,566)
Cash-flow-statement-based aggregate accruals 707 (1,006) (2,719) 793 (655)
Financial Ratio
Cash-flow-statement-based accruals ratio1 5.15% -7.70% -18.96% 5.21%
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
Chevron Corp. -1.22% -4.57% -5.42%
ConocoPhillips -1.56% -0.78% -8.78%
Exxon Mobil Corp. -2.93% -6.69% -7.93%
Marathon Petroleum Corp. -4.94% 14.35% -11.70%
Occidental Petroleum Corp. 2.84% -13.52% -29.21%
Valero Energy Corp. 5.69% -9.15% 0.18%
Cash-Flow-Statement-Based Accruals Ratio, Sector
Oil, Gas & Consumable Fuels -1.51% -4.28% -9.46% 5.76%
Cash-Flow-Statement-Based Accruals Ratio, Industry
Energy -1.25% -4.41% -10.74% 1.30%

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 × 707 ÷ [(14,491 + 12,990) ÷ 2] = 5.15%

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, Hess Corp. improved earnings quality from 2021 to 2022.