Stock Analysis on Net

Etsy Inc. (NASDAQ:ETSY)

This company has been moved to the archive! The financial data has not been updated since November 3, 2022.

Financial Reporting Quality: Aggregate Accruals

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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

Etsy Inc., balance sheet computation of aggregate accruals

US$ in thousands

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Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Operating Assets
Total assets 3,831,809 2,404,489 1,542,352 901,851 605,583
Less: Cash and cash equivalents 780,196 1,244,099 443,293 366,985 315,442
Less: Short-term investments 204,416 425,119 373,959 257,302 25,108
Operating assets 2,847,197 735,271 725,100 277,564 265,033
Operating Liabilities
Total liabilities 3,203,190 1,662,065 1,135,718 500,953 208,689
Less: Finance lease obligations, current 2,418 8,537 8,275 3,884 5,798
Less: Finance lease obligations, net of current portion 110,283 44,979 53,611 2,095 4,115
Less: Facility financing obligation 59,991 60,049
Less: Long-term debt, net 2,275,418 1,062,299 785,126 276,486
Operating liabilities 815,071 546,250 288,706 158,497 138,727
 
Net operating assets1 2,032,126 189,021 436,394 119,067 126,306
Balance-sheet-based aggregate accruals2 1,843,105 (247,373) 317,327 (7,239)
Financial Ratio
Balance-sheet-based accruals ratio3 165.96% -79.11% 114.26% -5.90%
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
Amazon.com Inc. 49.06% 18.08%
Home Depot Inc. 21.77% 2.66%
Lowe’s Cos. Inc. -12.39% 6.39%
TJX Cos. Inc. -109.84% 15.53%
Balance-Sheet-Based Accruals Ratio, Sector
Consumer Discretionary Distribution & Retail 31.88% 12.49% 200.00%
Balance-Sheet-Based Accruals Ratio, Industry
Consumer Discretionary 15.91% 5.08% 200.00%

Based on: 10-K (reporting date: 2021-12-31), 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).

1 2021 Calculation
Net operating assets = Operating assets – Operating liabilities
= 2,847,197815,071 = 2,032,126

2 2021 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2021 – Net operating assets2020
= 2,032,126189,021 = 1,843,105

3 2021 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × 1,843,105 ÷ [(2,032,126 + 189,021) ÷ 2] = 165.96%

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, Etsy Inc. deteriorated earnings quality from 2020 to 2021.

Cash-Flow-Statement-Based Accruals Ratio

Etsy Inc., cash flow statement computation of aggregate accruals

US$ in thousands

Microsoft Excel
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Net income 493,507 349,246 95,894 77,491 81,800
Less: Net cash provided by operating activities 651,551 678,956 206,920 198,925 67,420
Less: Net cash (used in) provided by investing activities (1,557,969) (11,379) (488,373) (285,393) 61,836
Cash-flow-statement-based aggregate accruals 1,399,925 (318,331) 377,347 163,959 (47,456)
Financial Ratio
Cash-flow-statement-based accruals ratio1 126.05% -101.80% 135.87% 133.64%
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
Amazon.com Inc. 48.44% 23.04%
Home Depot Inc. 14.26% 0.66%
Lowe’s Cos. Inc. -17.28% 6.85%
TJX Cos. Inc. -121.39% 14.48%
Cash-Flow-Statement-Based Accruals Ratio, Sector
Consumer Discretionary Distribution & Retail 29.06% 14.86% -9.94%
Cash-Flow-Statement-Based Accruals Ratio, Industry
Consumer Discretionary 12.28% 3.83% -8.48%

Based on: 10-K (reporting date: 2021-12-31), 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).

1 2021 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × 1,399,925 ÷ [(2,032,126 + 189,021) ÷ 2] = 126.05%

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, Etsy Inc. deteriorated earnings quality from 2020 to 2021.