Accrual Ratio (Balance Sheet)

Accrual Ratio (Balance Sheet) =  (NOA - NOA previous year) / ((NOA + NOA previous year) / 2)

NOA = Net operating assets = (Total assets – Cash) - (Total liabilities – Total debt)

 

The change in Net Operating Assets

The ratio shows you the change in net operating assets, compared to the average net operating assets over the past two years.

 

What to be careful of

Thus an increase in sales and or earnings accompanied by an increase in the Accrual Ratio (Balance Sheet) should raise a red flag as it may mean that cash for the sales were not received.

You should also be careful of a higher than industry-average growth rate in sales and, or profitability with a higher than industry-average accruals ratio.

 

How to use the ratio

Available as a screening ratio: Yes

Available as an output column ratio: Yes

 

How to select the companies with the lowest Accrual Ratio (Balance Sheet) 

To find companies with the lowest Accrual Ratio (Balance Sheet) set the slider from 80% to 100%.

 

Click here to start using the Accrual Ratio in your portfolio NOW!