Microsoft Excel LibreOffice Calc

TJX Cos. Inc. (NYSE:TJX)


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

TJX Cos. Inc., balance sheet computation of aggregate accruals

US$ in thousands

Microsoft Excel LibreOffice Calc
Feb 1, 2020 Feb 2, 2019 Feb 3, 2018 Jan 28, 2017 Jan 30, 2016 Jan 31, 2015
Operating Assets
Total assets 24,145,003  14,326,029  14,058,015  12,883,808  11,499,482  11,128,381 
Less: Cash and cash equivalents 3,216,752  3,030,229  2,758,477  2,929,849  2,095,473  2,493,775 
Less: Short-term investments —  —  506,165  543,242  352,313  282,623 
Operating assets 20,928,251  11,295,800  10,793,373  9,410,717  9,051,696  8,351,983 
Operating Liabilities
Total liabilities 18,196,791  9,277,423  8,909,706  8,373,209  7,192,407  6,864,151 
Less: Long-term debt 2,236,625  2,233,616  2,230,607  2,227,599  1,624,054  1,623,864 
Operating liabilities 15,960,166  7,043,807  6,679,099  6,145,610  5,568,353  5,240,287 
 
Net operating assets1 4,968,085  4,251,993  4,114,274  3,265,107  3,483,343  3,111,696 
Balance-sheet-based aggregate accruals2 716,092  137,719  849,167  (218,236) 371,647 
Financial Ratio
Balance-sheet-based accruals ratio3 15.53% 3.29% 23.01% -6.47% 11.27%
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
Amazon.com Inc. 27.51% 21.63% 105.22% 18.05%
Costco Wholesale Corp. 4.27% 3.79% -6.51% 18.80% 2.66%
Dollar General Corp. 3.56% 2.04% 5.02% 2.88% 3.98%
Home Depot Inc. 2.66% 2.61% -2.02% -0.07% 2.47%
Lowe’s Cos. Inc. 6.39% -14.72% 3.22% 9.18% -5.72%
Target Corp. -1.25% 1.74% -2.57% -2.24% -12.59%
Walmart Inc. -2.64% 7.50% 0.79% -4.36% -1.78%
Balance-Sheet-Based Accruals Ratio, Sector
General Retailers 0.00% 8.33% 4.37% 8.42% -0.42%
Balance-Sheet-Based Accruals Ratio, Industry
Consumer Services 0.00% 10.83% 16.16% 7.61% 13.28%

Based on: 10-K (filing date: 2020-03-27), 10-K (filing date: 2019-04-03), 10-K (filing date: 2018-04-04), 10-K (filing date: 2017-03-28), 10-K (filing date: 2016-03-29), 10-K (filing date: 2015-03-31).

1 2020 Calculation
Net operating assets = Operating assets – Operating liabilities
= 20,928,25115,960,166 = 4,968,085

2 2020 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2020 – Net operating assets2019
= 4,968,0854,251,993 = 716,092

3 2020 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × 716,092 ÷ [(4,968,085 + 4,251,993) ÷ 2] = 15.53%

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, TJX Cos. Inc. deteriorated earnings quality from 2019 to 2020.

Cash-Flow-Statement-Based Accruals Ratio

TJX Cos. Inc., cash flow statement computation of aggregate accruals

US$ in thousands

Microsoft Excel LibreOffice Calc
Feb 1, 2020 Feb 2, 2019 Feb 3, 2018 Jan 28, 2017 Jan 30, 2016 Jan 31, 2015
Net income 3,272,193  3,059,798  2,607,948  2,298,234  2,277,658  2,215,128 
Less: Net cash provided by operating activities 4,066,540  4,088,459  3,025,624  3,601,894  2,937,343  3,008,369 
Less: Net cash used in investing activities (1,461,971) (623,552) (1,012,736) (1,214,878) (1,063,115) (954,637)
Cash-flow-statement-based aggregate accruals 667,624  (405,109) 595,060  (88,782) 403,430  161,396 
Financial Ratio
Cash-flow-statement-based accruals ratio1 14.48% -9.68% 16.13% -2.63% 12.23%
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
Amazon.com Inc. -5.12% -20.61% 52.87% -41.10%
Costco Wholesale Corp. 1.32% 2.52% -13.60% 12.02% 5.48%
Dollar General Corp. 2.79% 1.98% 4.42% 2.37% 3.62%
Home Depot Inc. 0.66% 1.98% -4.67% -0.96% 2.46%
Lowe’s Cos. Inc. 6.85% -13.55% -0.81% 4.08% -4.44%
Target Corp. -4.18% 1.84% -4.02% -5.22% -9.80%
Walmart Inc. -0.97% 2.36% -7.84% -3.19% -1.60%
Cash-Flow-Statement-Based Accruals Ratio, Sector
General Retailers 0.00% -0.62% -7.36% 2.71% -2.93%
Cash-Flow-Statement-Based Accruals Ratio, Industry
Consumer Services 0.00% 1.62% 7.15% 4.39% 1.72%

Based on: 10-K (filing date: 2020-03-27), 10-K (filing date: 2019-04-03), 10-K (filing date: 2018-04-04), 10-K (filing date: 2017-03-28), 10-K (filing date: 2016-03-29), 10-K (filing date: 2015-03-31).

1 2020 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × 667,624 ÷ [(4,968,085 + 4,251,993) ÷ 2] = 14.48%

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, TJX Cos. Inc. deteriorated earnings quality from 2019 to 2020.