Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

Phillips 66 (NYSE:PSX)

This company was transferred to the archive: financial data is no longer updated!

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

Phillips 66, balance sheet computation of aggregate accruals

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Operating Assets
Total assets 58,720  54,302  54,371  51,653  48,580 
Less: Cash and cash equivalents 1,614  3,019  3,119  2,711  3,074 
Operating assets 57,106  51,283  51,252  48,942  45,506 
Operating Liabilities
Total liabilities 31,551  27,149  26,943  27,928  24,642 
Less: Short-term debt 547  67  41  550  44 
Less: Long-term debt 11,216  11,093  10,069  9,588  8,843 
Operating liabilities 19,788  15,989  16,833  17,790  15,755 
 
Net operating assets1 37,318  35,294  34,419  31,152  29,751 
Balance-sheet-based aggregate accruals2 2,024  875  3,267  1,401 
Financial Ratio
Balance-sheet-based accruals ratio3 5.57% 2.51% 9.96% 4.60%
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
Chevron Corp. -7.70% -1.93% -1.40% 2.56%
Exxon Mobil Corp. 3.99% -0.16% 9.28% 0.54%
Balance-Sheet-Based Accruals Ratio, Sector
Oil & Gas Producers -0.93% -0.94% 4.45% 1.48%

Based on: 10-K (filing date: 2020-02-21), 10-K (filing date: 2019-02-22), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-17), 10-K (filing date: 2016-02-19).

1 2019 Calculation
Net operating assets = Operating assets – Operating liabilities
= 57,10619,788 = 37,318

2 2019 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2019 – Net operating assets2018
= 37,31835,294 = 2,024

3 2019 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × 2,024 ÷ [(37,318 + 35,294) ÷ 2] = 5.57%

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, Phillips 66 deteriorated earnings quality from 2018 to 2019.

Cash-Flow-Statement-Based Accruals Ratio

Phillips 66, cash flow statement computation of aggregate accruals

US$ in millions

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Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Net income attributable to Phillips 66 3,076  5,595  5,106  1,555  4,227 
Less: Net cash provided by operating activities 4,808  7,573  3,648  2,963  5,713 
Less: Net cash used in investing activities (3,688) (2,471) (1,146) (3,158) (5,738)
Cash-flow-statement-based aggregate accruals 1,956  493  2,604  1,750  4,252 
Financial Ratio
Cash-flow-statement-based accruals ratio1 5.39% 1.41% 7.94% 5.75%
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
Chevron Corp. -7.47% -1.93% -1.69% 1.91%
Exxon Mobil Corp. 3.24% 0.54% 2.41% -0.87%
Cash-Flow-Statement-Based Accruals Ratio, Sector
Oil & Gas Producers -1.27% -0.54% 0.55% 0.42%

Based on: 10-K (filing date: 2020-02-21), 10-K (filing date: 2019-02-22), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-17), 10-K (filing date: 2016-02-19).

1 2019 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × 1,956 ÷ [(37,318 + 35,294) ÷ 2] = 5.39%

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, Phillips 66 deteriorated earnings quality from 2018 to 2019.