Stock Analysis on Net

Norfolk Southern Corp. (NYSE:NSC)

This company has been moved to the archive! The financial data has not been updated since April 27, 2022.

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

Norfolk Southern Corp., balance sheet computation of aggregate accruals

US$ in millions

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Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Operating Assets
Total assets 38,493 37,962 37,923 36,239 35,711
Less: Cash and cash equivalents 839 1,115 580 358 690
Operating assets 37,654 36,847 37,343 35,881 35,021
Operating Liabilities
Total liabilities 24,852 23,171 22,739 20,877 19,352
Less: Short-term debt 100
Less: Current maturities of long-term debt 553 579 316 585 600
Less: Long-term debt, excluding current maturities 13,287 12,102 11,880 10,560 9,136
Operating liabilities 11,012 10,490 10,543 9,732 9,516
 
Net operating assets1 26,642 26,357 26,800 26,149 25,505
Balance-sheet-based aggregate accruals2 285 (443) 651 644
Financial Ratio
Balance-sheet-based accruals ratio3 1.08% -1.67% 2.46% 2.49%
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
FedEx Corp. 6.93% 7.01% 0.86%
Uber Technologies Inc. 31.28% 38.96%
Union Pacific Corp. 2.46% -1.44%
United Parcel Service Inc. 29.53% -18.06%
Balance-Sheet-Based Accruals Ratio, Sector
Transportation 13.12% 2.52% 200.00%
Balance-Sheet-Based Accruals Ratio, Industry
Industrials 3.53% 6.45% 200.00%

Based on: 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), 10-K (reporting date: 2017-12-31).

1 2021 Calculation
Net operating assets = Operating assets – Operating liabilities
= 37,65411,012 = 26,642

2 2021 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2021 – Net operating assets2020
= 26,64226,357 = 285

3 2021 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × 285 ÷ [(26,642 + 26,357) ÷ 2] = 1.08%

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, Norfolk Southern Corp. improved earnings quality from 2020 to 2021.

Cash-Flow-Statement-Based Accruals Ratio

Norfolk Southern Corp., cash flow statement computation of aggregate accruals

US$ in millions

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Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Net income 3,005 2,013 2,722 2,666 5,404
Less: Net cash provided by operating activities 4,255 3,637 3,892 3,726 3,253
Less: Net cash used in investing activities (1,222) (1,175) (1,764) (1,658) (1,481)
Cash-flow-statement-based aggregate accruals (28) (449) 594 598 3,632
Financial Ratio
Cash-flow-statement-based accruals ratio1 -0.11% -1.69% 2.24% 2.32%
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
FedEx Corp. 3.01% 5.95% 1.22%
Uber Technologies Inc. 6.66% -9.47%
Union Pacific Corp. 0.47% -1.22%
United Parcel Service Inc. 7.63% -18.35%
Cash-Flow-Statement-Based Accruals Ratio, Sector
Transportation 3.50% -3.17% -0.72%
Cash-Flow-Statement-Based Accruals Ratio, Industry
Industrials -9.37% -1.67% -12.14%

Based on: 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), 10-K (reporting date: 2017-12-31).

1 2021 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × -28 ÷ [(26,642 + 26,357) ÷ 2] = -0.11%

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, Norfolk Southern Corp. improved earnings quality from 2020 to 2021.