Financial Reporting Quality: Aggregate Accruals
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
Uber Technologies Inc., balance sheet computation of aggregate accruals
US$ in millions
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Operating Assets | ||||||
| Total assets | 61,802) | 51,244) | 38,699) | 32,109) | 38,774) | |
| Less: Cash and cash equivalents | 7,105) | 5,893) | 4,680) | 4,208) | 4,295) | |
| Less: Short-term investments | 528) | 1,084) | 727) | 103) | —) | |
| Less: Restricted cash and cash equivalents | 631) | 545) | 805) | 680) | 631) | |
| Operating assets | 53,538) | 43,722) | 32,487) | 27,118) | 33,848) | |
| Operating Liabilities | ||||||
| Total liabilities | 33,719) | 28,768) | 26,017) | 23,605) | 23,425) | |
| Less: Current portion of long-term debt | —) | 1,150) | 25) | 27) | 27) | |
| Less: Finance leases liabilities, current | 138) | 136) | 156) | 115) | 191) | |
| Less: Long-term debt, net of current portion | 10,521) | 8,347) | 9,459) | 9,265) | 9,276) | |
| Less: Finance leases liabilities, non-current | 84) | 174) | 322) | 284) | 43) | |
| Operating liabilities | 22,976) | 18,961) | 16,055) | 13,914) | 13,888) | |
| Net operating assets1 | 30,562) | 24,761) | 16,432) | 13,204) | 19,960) | |
| Balance-sheet-based aggregate accruals2 | 5,801) | 8,329) | 3,228) | (6,756) | —) | |
| Financial Ratio | ||||||
| Balance-sheet-based accruals ratio3 | 20.97% | 40.44% | 21.78% | -40.74% | — | |
| Benchmarks | ||||||
| Balance-Sheet-Based Accruals Ratio, Competitors4 | ||||||
| FedEx Corp. | 4.42% | 3.63% | 3.85% | 0.91% | 6.93% | |
| Union Pacific Corp. | 4.06% | 1.61% | 3.95% | 3.63% | — | |
| United Airlines Holdings Inc. | 4.28% | 0.97% | 15.54% | 3.50% | — | |
| United Parcel Service Inc. | 7.77% | -13.05% | 7.14% | 26.54% | — | |
| Balance-Sheet-Based Accruals Ratio, Sector | ||||||
| Transportation | 7.49% | 3.77% | 8.09% | 2.58% | — | |
| Balance-Sheet-Based Accruals Ratio, Industry | ||||||
| Industrials | 5.68% | 4.36% | -0.84% | 0.67% | — | |
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
Net operating assets = Operating assets – Operating liabilities
= 53,538 – 22,976 = 30,562
2 2025 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2025 – Net operating assets2024
= 30,562 – 24,761 = 5,801
3 2025 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × 5,801 ÷ [(30,562 + 24,761) ÷ 2] = 20.97%
4 Click competitor name to see calculations.
The balance-sheet-based accruals ratio exhibits significant fluctuations over the observed period. Net operating assets demonstrate a consistent upward trend, while aggregate accruals show a marked shift from negative to positive values before stabilizing. These movements warrant further investigation into the underlying accounting practices and potential impacts on reported earnings quality.
- Net Operating Assets
- Net operating assets increased steadily from US$13,204 million in 2022 to US$30,562 million in 2025. This represents a cumulative increase of 131.4% over the four-year period, indicating substantial growth in the company’s operational scale.
- Balance-Sheet-Based Aggregate Accruals
- Aggregate accruals were negative in 2022, registering at US$-6,756 million. However, they turned positive in 2023, reaching US$3,228 million, and continued to rise to US$8,329 million in 2024. In 2025, aggregate accruals decreased to US$5,801 million, though remaining positive. The initial negative value suggests a potential reduction in investment in working capital or other accrual-based items in 2022, while the subsequent positive values indicate increased accruals relative to cash flows.
- Balance-Sheet-Based Accruals Ratio
- The accruals ratio was -40.74% in 2022, reflecting the negative aggregate accruals. A substantial increase was observed in 2023, with the ratio reaching 21.78%. The ratio peaked at 40.44% in 2024 before decreasing to 20.97% in 2025. An accruals ratio significantly different from zero, in either direction, can signal potential concerns regarding the quality of reported earnings. The large swing from negative to positive, and the subsequent high positive values, suggest a need to examine the components of accruals and their relationship to cash flows. The decrease in 2025, while still positive, may indicate a moderation in accrual-based earnings management.
The observed patterns suggest a dynamic relationship between operating asset growth and accrual patterns. The significant fluctuations in the accruals ratio necessitate a deeper dive into the specific accrual accounts driving these changes to assess the sustainability of reported earnings and potential accounting policy choices.
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Cash-Flow-Statement-Based Accruals Ratio
Uber Technologies Inc., cash flow statement computation of aggregate accruals
US$ in millions
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Net income (loss) attributable to Uber Technologies, Inc. | 10,053) | 9,856) | 1,887) | (9,141) | (496) | |
| Less: Net cash provided by (used in) operating activities | 10,099) | 7,137) | 3,585) | 642) | (445) | |
| Less: Net cash used in investing activities | (3,564) | (3,177) | (3,226) | (1,637) | (1,201) | |
| Cash-flow-statement-based aggregate accruals | 3,518) | 5,896) | 1,528) | (8,146) | 1,150) | |
| Financial Ratio | ||||||
| Cash-flow-statement-based accruals ratio1 | 12.72% | 28.63% | 10.31% | -49.13% | — | |
| Benchmarks | ||||||
| Cash-Flow-Statement-Based Accruals Ratio, Competitors2 | ||||||
| FedEx Corp. | 2.72% | 3.01% | 3.32% | 2.12% | 3.01% | |
| Union Pacific Corp. | 3.35% | 1.55% | 3.67% | 2.53% | — | |
| United Airlines Holdings Inc. | 4.64% | -13.64% | 7.35% | 38.00% | — | |
| United Parcel Service Inc. | 5.59% | -12.08% | 10.26% | 16.44% | — | |
| Cash-Flow-Statement-Based Accruals Ratio, Sector | ||||||
| Transportation | 5.27% | 0.04% | 6.23% | 4.77% | — | |
| Cash-Flow-Statement-Based Accruals Ratio, Industry | ||||||
| Industrials | 2.24% | 5.28% | 1.66% | -2.30% | — | |
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × 3,518 ÷ [(30,562 + 24,761) ÷ 2] = 12.72%
2 Click competitor name to see calculations.
The analysis reveals a significant shift in cash-flow-statement-based accruals over the four-year period. Net operating assets demonstrate consistent growth, while the cash-flow-statement-based aggregate accruals and accruals ratio exhibit substantial volatility.
- Net Operating Assets
- Net operating assets increased steadily from US$13.204 billion in 2022 to US$30.562 billion in 2025, indicating consistent expansion of the company’s operational footprint. This growth suggests increasing investment in, and utilization of, operating assets.
- Cash-Flow-Statement-Based Aggregate Accruals
- Cash-flow-statement-based aggregate accruals experienced a dramatic change in trend. In 2022, accruals were negative, totaling US$-8.146 billion. This negative value was followed by positive accruals of US$1.528 billion in 2023, US$5.896 billion in 2024, and US$3.518 billion in 2025. The shift from negative to positive accruals suggests a change in the relationship between reported earnings and actual cash flows.
- Cash-Flow-Statement-Based Accruals Ratio
- The accruals ratio mirrors the trend observed in aggregate accruals. It began at -49.13% in 2022, indicating substantial reliance on non-cash accounting adjustments to achieve reported earnings. The ratio increased to 10.31% in 2023, 28.63% in 2024, and then decreased to 12.72% in 2025. The increasing ratio from 2022 to 2024 suggests a growing proportion of earnings derived from accruals, while the decrease in 2025 indicates a moderation of this trend. A high accruals ratio can sometimes signal potential earnings management, and warrants further investigation.
The substantial fluctuations in the accruals ratio, particularly the move from negative to positive territory, require further scrutiny. While growth in net operating assets is positive, the changing accruals pattern suggests a dynamic relationship between cash flows and reported earnings that should be examined in the context of the company’s accounting policies and business operations.
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