Stock Analysis on Net

ServiceNow Inc. (NYSE:NOW)

Financial Reporting Quality: Aggregate Accruals

Microsoft Excel LibreOffice Calc

Balance-Sheet-Based Accruals Ratio

ServiceNow Inc., balance sheet computation of aggregate accruals

US$ in thousands

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Operating Assets
Total assets 8,715,057  6,022,430  3,879,140  3,397,904  2,033,767 
Less: Cash and cash equivalents 1,676,794  775,778  566,204  726,495  401,238 
Less: Short-term investments 1,415,242  915,317  931,718  1,052,803  498,124 
Operating assets 5,623,021  4,331,335  2,381,218  1,618,606  1,134,405 
Operating Liabilities
Total liabilities 5,880,576  3,894,489  2,767,941  2,813,772  1,646,806 
Less: Current portion of long-term debt —  —  —  543,418  — 
Less: Long-term debt, less current portion 1,640,153  694,981  661,707  630,018  507,812 
Operating liabilities 4,240,423  3,199,508  2,106,234  1,640,336  1,138,994 
 
Net operating assets1 1,382,598  1,131,827  274,984  (21,730) (4,589)
Balance-sheet-based aggregate accruals2 250,771  856,843  296,714  (17,141) — 
Financial Ratio
Balance-sheet-based accruals ratio3 19.95% 121.81% 234.32%
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
Accenture PLC 3.73% 42.14% 1.41% 51.55%
Adobe Inc. 8.20% 2.25% 77.63% -0.97% -7.49%
Autodesk Inc. -160.20% 197.08% -191.79% -90.11%
Automatic Data Processing Inc.
Fidelity National Information Services Inc. -2.04% 114.63% -3.10% -4.03%
Fiserv Inc. -5.06% 150.79% 7.01% 7.13%
International Business Machines Corp. -9.64% 38.84% -2.32% -0.63%
Intuit Inc. -1.39% 29.27% 1.03% -1.49%
Mastercard Inc. 25.41% 91.82% 13.74% 45.38%
Microsoft Corp. 14.41% 46.31% 4.67% 72.10%
Oracle Corp. 1.35% 2.79% -15.16% 25.88%
PayPal Holdings Inc.
salesforce.com inc. 65.87% 71.99% -11.13% 34.12%
Visa Inc. 2.71% 1.03% 1.56% -6.20%
Balance-Sheet-Based Accruals Ratio, Sector
Software & Services 3.34% 62.53% -2.97% 19.39%
Balance-Sheet-Based Accruals Ratio, Industry
Information Technology 1.59% 21.19% -3.14% 12.23%

Based on: 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), 10-K (reporting date: 2016-12-31).

1 2020 Calculation
Net operating assets = Operating assets – Operating liabilities
= 5,623,0214,240,423 = 1,382,598

2 2020 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2020 – Net operating assets2019
= 1,382,5981,131,827 = 250,771

3 2020 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × 250,771 ÷ [(1,382,598 + 1,131,827) ÷ 2] = 19.95%

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, ServiceNow Inc. improved earnings quality from 2019 to 2020.

Cash-Flow-Statement-Based Accruals Ratio

ServiceNow Inc., cash flow statement computation of aggregate accruals

US$ in thousands

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Net income (loss) 118,503  626,698  (26,704) (149,130) (451,804)
Less: Net cash provided by operating activities 1,786,599  1,235,972  811,089  642,825  159,921 
Less: Net cash used in investing activities (1,506,872) (724,477) (347,422) (883,948) (108,448)
Cash-flow-statement-based aggregate accruals (161,224) 115,203  (490,371) 91,993  (503,277)
Financial Ratio
Cash-flow-statement-based accruals ratio1 -12.82% 16.38% -387.26%
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
Accenture PLC -13.65% -1.28% -12.70% 15.84%
Adobe Inc. -0.48% -9.78% 43.94% -17.08% -1.50%
Autodesk Inc. -223.04% 54.30% -648.67% -173.41%
Automatic Data Processing Inc.
Fidelity National Information Services Inc. -5.19% 12.92% -2.65% -5.93%
Fiserv Inc. -5.23% 46.15% 3.94% 5.95%
International Business Machines Corp. -13.41% 34.45% -3.14% -7.47%
Intuit Inc. -34.22% -15.95% -34.47% -50.61%
Mastercard Inc. 19.04% 47.01% 8.38% 10.80%
Microsoft Corp. -8.19% 7.37% -73.75% 137.66%
Oracle Corp. -31.35% -74.80% -13.86% 40.94%
PayPal Holdings Inc.
salesforce.com inc. -5.62% 28.07% -8.23% 10.67%
Visa Inc. -2.71% -0.31% 1.88% -8.84%
Cash-Flow-Statement-Based Accruals Ratio, Sector
Software & Services -7.85% 9.39% -17.68% 21.81%
Cash-Flow-Statement-Based Accruals Ratio, Industry
Information Technology -6.37% -6.35% -17.80% 10.52%

Based on: 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), 10-K (reporting date: 2016-12-31).

1 2020 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × -161,224 ÷ [(1,382,598 + 1,131,827) ÷ 2] = -12.82%

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, ServiceNow Inc. improved earnings quality from 2019 to 2020.