Stock Analysis on Net

Kellanova (NYSE:K)

This company has been moved to the archive! The financial data has not been updated since August 1, 2024.

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

Kellanova, balance sheet computation of aggregate accruals

US$ in millions

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Dec 30, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 28, 2019
Operating Assets
Total assets 15,621 18,496 18,178 17,996 17,564
Less: Cash and cash equivalents 274 299 286 435 397
Operating assets 15,347 18,197 17,892 17,561 17,167
Operating Liabilities
Total liabilities 12,252 14,121 13,963 14,360 14,250
Less: Current maturities of long-term debt 663 780 712 627 620
Less: Notes payable 121 467 137 102 107
Less: Long-term debt, excluding current maturities 5,089 5,317 6,262 6,746 7,195
Operating liabilities 6,379 7,557 6,852 6,885 6,328
 
Net operating assets1 8,968 10,640 11,040 10,676 10,839
Balance-sheet-based aggregate accruals2 (1,672) (400) 364 (163)
Financial Ratio
Balance-sheet-based accruals ratio3 -17.05% -3.69% 3.35% -1.52%
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
Altria Group Inc. 1.75% -15.59% -22.67% -16.03%
Coca-Cola Co. 4.65% -3.05% 3.39% 0.90%
PepsiCo Inc. 3.36% 0.98% 4.76% 15.56%
Philip Morris International Inc. 5.21% 75.98% 10.28% -6.81%
Balance-Sheet-Based Accruals Ratio, Sector
Food, Beverage & Tobacco 4.01% 9.48% 0.04% 1.19%
Balance-Sheet-Based Accruals Ratio, Industry
Consumer Staples 3.79% 6.55% -1.60% -1.00%

Based on: 10-K (reporting date: 2023-12-30), 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: 2019-12-28).

1 2023 Calculation
Net operating assets = Operating assets – Operating liabilities
= 15,3476,379 = 8,968

2 2023 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2023 – Net operating assets2022
= 8,96810,640 = -1,672

3 2023 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × -1,672 ÷ [(8,968 + 10,640) ÷ 2] = -17.05%

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, Kellanova deteriorated earnings quality from 2022 to 2023.

Cash-Flow-Statement-Based Accruals Ratio

Kellanova, cash flow statement computation of aggregate accruals

US$ in millions

Microsoft Excel
Dec 30, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 28, 2019
Net income attributable to Kellanova 951 960 1,488 1,251 960
Less: Net cash provided by operating activities 1,645 1,651 1,701 1,986 1,176
Less: Net cash (used in) provided by investing activities (562) (448) (528) (585) 774
Cash-flow-statement-based aggregate accruals (132) (243) 315 (150) (990)
Financial Ratio
Cash-flow-statement-based accruals ratio1 -1.35% -2.24% 2.90% -1.39%
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
Altria Group Inc. 0.67% -16.12% -28.92% -12.63%
Coca-Cola Co. 4.51% -1.32% -0.16% -1.17%
PepsiCo Inc. 2.17% 1.04% -1.48% 18.19%
Philip Morris International Inc. 6.40% 57.17% -3.48% -4.27%
Cash-Flow-Statement-Based Accruals Ratio, Sector
Food, Beverage & Tobacco 3.71% 7.00% -5.94% 2.21%
Cash-Flow-Statement-Based Accruals Ratio, Industry
Consumer Staples 3.35% 3.63% -7.10% -1.99%

Based on: 10-K (reporting date: 2023-12-30), 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: 2019-12-28).

1 2023 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × -132 ÷ [(8,968 + 10,640) ÷ 2] = -1.35%

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, Kellanova improved earnings quality from 2022 to 2023.