Stock Analysis on Net

RTX Corp. (NYSE:RTX)

$24.99

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.

Paying user area

The data is hidden behind: . Unhide it.

This is a one-time payment. There is no automatic renewal.


We accept:

Visa Mastercard American Express Maestro Discover JCB PayPal Google Pay
Visa Secure Mastercard Identity Check American Express SafeKey

Balance-Sheet-Based Accruals Ratio

RTX Corp., balance sheet computation of aggregate accruals

US$ in millions

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Operating Assets
Total assets
Less: Cash and cash equivalents
Operating assets
Operating Liabilities
Total liabilities
Less: Short-term borrowings
Less: Long-term debt currently due
Less: Long-term debt, excluding currently due
Operating liabilities
 
Net operating assets1
Balance-sheet-based aggregate accruals2
Financial Ratio
Balance-sheet-based accruals ratio3
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
Boeing Co.
Caterpillar Inc.
Eaton Corp. plc
GE Aerospace
Honeywell International Inc.
Lockheed Martin Corp.
Balance-Sheet-Based Accruals Ratio, Sector
Capital Goods
Balance-Sheet-Based Accruals Ratio, Industry
Industrials

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

1 2024 Calculation
Net operating assets = Operating assets – Operating liabilities
= =

2 2024 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2024 – Net operating assets2023
= =

3 2024 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × ÷ [( + ) ÷ 2] =

4 Click competitor name to see calculations.


Net operating assets
The net operating assets exhibited a relatively stable trend over the four-year period. Beginning at 98,352 million US dollars at the end of 2021, this figure increased slightly to 99,908 million in 2022. Subsequently, it experienced a modest decline, oscillating around 98,685 million in 2023 and further decreasing to 97,641 million by the end of 2024. Overall, the changes in net operating assets were minimal, suggesting a steady level of operating investment and resources employed in the business.
Balance-sheet-based aggregate accruals
This measure showed a notable shift in sign and magnitude across the analyzed years. In 2021 and 2022, the aggregate accruals were positive, recorded at 1,447 million and 1,556 million US dollars, respectively, indicating the accrual component was adding to earnings. However, in 2023, accruals turned significantly negative to -1,223 million and remained negative at -1,044 million in 2024, signaling a reversal in earnings adjustments related to accruals. This shift implies a change in the timing of revenue or expense recognition, potentially affecting earnings quality and cash flow conversion.
Balance-sheet-based accruals ratio
Consistent with the aggregate accruals, the accruals ratio demonstrates a transition from positive to negative values. The ratio increased slightly from 1.48% in 2021 to 1.57% in 2022, reflecting a stable or slightly increasing level of accrual-based earnings adjustments relative to net operating assets. In 2023, the ratio shifted sharply to -1.23% and then to -1.06% in 2024. The negative ratios suggest that accruals reduced reported earnings relative to net operating assets, which might hint at more conservative accounting or potential operational challenges impacting earnings reliability during these years.

Cash-Flow-Statement-Based Accruals Ratio

RTX Corp., cash flow statement computation of aggregate accruals

US$ in millions

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Net income (loss) attributable to common shareowners
Less: Net cash flows provided by operating activities
Less: Net cash flows (used in) provided by investing activities
Cash-flow-statement-based aggregate accruals
Financial Ratio
Cash-flow-statement-based accruals ratio1
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
Boeing Co.
Caterpillar Inc.
Eaton Corp. plc
GE Aerospace
Honeywell International Inc.
Lockheed Martin Corp.
Cash-Flow-Statement-Based Accruals Ratio, Sector
Capital Goods
Cash-Flow-Statement-Based Accruals Ratio, Industry
Industrials

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

1 2024 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × ÷ [( + ) ÷ 2] =

2 Click competitor name to see calculations.


Net Operating Assets
The net operating assets exhibited a slight upward trend from US$98,352 million at the end of 2021 to US$99,908 million at the end of 2022. However, this was followed by a gradual decrease over the next two years, reaching US$98,685 million at the end of 2023 and further declining to US$97,641 million by the end of 2024. Overall, the net operating assets experienced modest fluctuations with a marginal net decrease when comparing 2024 to 2021 figures.
Cash-flow-statement-based Aggregate Accruals
The aggregate accruals showed considerable volatility throughout the period. Beginning with a negative value of US$ -1,914 million in 2021, the accruals shifted to a positive US$858 million in 2022, indicating an unusual swing. This was followed by a return to negative values in the subsequent years, with US$ -1,649 million in 2023 and US$ -851 million in 2024. The oscillation between negative and positive figures suggests irregularities or variability in accrual accounting adjustments during this timeframe.
Cash-flow-statement-based Accruals Ratio
The accruals ratio mirrored the trend observed in aggregate accruals, beginning at -1.96% in 2021, turning positive to 0.87% in 2022, and reverting to negative percentages in 2023 and 2024 at -1.66% and -0.87%, respectively. These fluctuations in the ratio indicate inconsistent alignment between accruals and operating cash flows over the years. The magnitude of negative ratios decreased somewhat by 2024, reflecting a partial reduction in accruals relative to operating cash flow compared to earlier years.