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.
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- Income Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Long-term (Investment) Activity Ratios
- Common Stock Valuation Ratios
- Capital Asset Pricing Model (CAPM)
- Selected Financial Data since 2005
- Net Profit Margin since 2005
- Return on Equity (ROE) since 2005
- Total Asset Turnover since 2005
- Price to Operating Profit (P/OP) since 2005
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Balance-Sheet-Based Accruals Ratio
Jan 31, 2025 | Jan 31, 2024 | Jan 31, 2023 | Jan 31, 2022 | Jan 31, 2021 | Jan 31, 2020 | ||
---|---|---|---|---|---|---|---|
Operating Assets | |||||||
Total assets | |||||||
Less: Cash and cash equivalents | |||||||
Less: Marketable securities | |||||||
Operating assets | |||||||
Operating Liabilities | |||||||
Total liabilities | |||||||
Less: Finance lease liabilities, current | |||||||
Less: Debt, current | |||||||
Less: Noncurrent debt, excluding current portion | |||||||
Less: Noncurrent finance lease liabilities | |||||||
Operating liabilities | |||||||
Net operating assets1 | |||||||
Balance-sheet-based aggregate accruals2 | |||||||
Financial Ratio | |||||||
Balance-sheet-based accruals ratio3 | |||||||
Benchmarks | |||||||
Balance-Sheet-Based Accruals Ratio, Competitors4 | |||||||
Accenture PLC | |||||||
Adobe Inc. | |||||||
Cadence Design Systems Inc. | |||||||
CrowdStrike Holdings Inc. | |||||||
Fair Isaac Corp. | |||||||
International Business Machines Corp. | |||||||
Intuit Inc. | |||||||
Microsoft Corp. | |||||||
Oracle Corp. | |||||||
Palantir Technologies Inc. | |||||||
Palo Alto Networks Inc. | |||||||
ServiceNow Inc. | |||||||
Synopsys Inc. | |||||||
Workday Inc. | |||||||
Balance-Sheet-Based Accruals Ratio, Sector | |||||||
Software & Services | |||||||
Balance-Sheet-Based Accruals Ratio, Industry | |||||||
Information Technology |
Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31).
1 2025 Calculation
Net operating assets = Operating assets – Operating liabilities
= – =
2 2025 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2025 – Net operating assets2024
= – =
3 2025 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 significant increase from 32,332 million US dollars in January 2021 to a peak of 58,575 million US dollars in January 2022. Following this peak, the figure experienced a gradual decline over the next two years, reaching 55,852 million in January 2024. A slight increase is observed in January 2025, bringing the total to 56,252 million. This trend indicates an initial rapid expansion in operating assets, followed by a stabilization at a moderately lower level.
- Balance-sheet-based Aggregate Accruals
- The aggregate accruals showed considerable volatility throughout the periods. Starting at 3,332 million US dollars in January 2021, there was a sharp increase to 26,243 million in January 2022. However, in the subsequent two years, the accruals shifted dramatically into negative territory, registering -1,332 million and -1,391 million in January 2023 and January 2024, respectively. In January 2025, the accruals returned to a positive value of 400 million. This fluctuation suggests notable changes in accounting estimates or earnings management practices over the years.
- Balance-sheet-based Accruals Ratio
- The accruals ratio mirrored the pattern seen in aggregate accruals and reflected the relative magnitude of accruals concerning net operating assets. It increased notably from 10.87% in January 2021 to a high of 57.74% in January 2022, indicating a substantial proportion of accruals relative to net operating assets during that year. The ratio then dropped into negative values in the following two years, with -2.3% in January 2023 and -2.46% in January 2024, reflecting the negative accrual levels recorded previously. In January 2025, the ratio reversed direction again, rising slightly to 0.71%, suggesting minimal positive accrual activity in relation to net operating assets.
Cash-Flow-Statement-Based Accruals Ratio
Jan 31, 2025 | Jan 31, 2024 | Jan 31, 2023 | Jan 31, 2022 | Jan 31, 2021 | Jan 31, 2020 | ||
---|---|---|---|---|---|---|---|
Net income | |||||||
Less: Net cash provided by operating activities | |||||||
Less: Net cash used in investing activities | |||||||
Cash-flow-statement-based aggregate accruals | |||||||
Financial Ratio | |||||||
Cash-flow-statement-based accruals ratio1 | |||||||
Benchmarks | |||||||
Cash-Flow-Statement-Based Accruals Ratio, Competitors2 | |||||||
Accenture PLC | |||||||
Adobe Inc. | |||||||
Cadence Design Systems Inc. | |||||||
CrowdStrike Holdings Inc. | |||||||
Fair Isaac Corp. | |||||||
International Business Machines Corp. | |||||||
Intuit Inc. | |||||||
Microsoft Corp. | |||||||
Oracle Corp. | |||||||
Palantir Technologies Inc. | |||||||
Palo Alto Networks Inc. | |||||||
ServiceNow Inc. | |||||||
Synopsys Inc. | |||||||
Workday Inc. | |||||||
Cash-Flow-Statement-Based Accruals Ratio, Sector | |||||||
Software & Services | |||||||
Cash-Flow-Statement-Based Accruals Ratio, Industry | |||||||
Information Technology |
Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31).
1 2025 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 increased significantly from 32,332 million USD in 2021 to 58,575 million USD in 2022, indicating a substantial expansion in operational investment during that period. Subsequently, the figure slightly declined over the next three years, reaching 56,252 million USD in 2025. This suggests a stabilization phase after rapid growth.
- Cash-flow-statement-based Aggregate Accruals
- Aggregate accruals demonstrated considerable volatility. Initially, accruals rose sharply from 3,242 million USD in 2021 to 9,980 million USD in 2022, indicating increased non-cash adjustments affecting earnings. From 2023 onwards, accruals turned negative, with values of -4,914 million USD in 2023, -4,771 million USD in 2024, and -3,732 million USD in 2025, reflecting a reversal in accruals and potential adjustments to earnings quality or cash flow timing.
- Cash-flow-statement-based Accruals Ratio
- This ratio mirrors the trend observed in aggregate accruals, moving from a positive 10.57% in 2021 to 21.96% in 2022, suggesting increased reliance on accrual accounting impacts relative to net operating assets. The ratio then shifted to negative values in subsequent years (-8.49% in 2023, -8.44% in 2024, and -6.66% in 2025), indicating a reduction in accruals relative to operating assets and possibly implying a movement towards earnings supported by actual cash flows rather than accrual adjustments.