Stock Analysis on Net

Gilead Sciences Inc. (NASDAQ:GILD)

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

Gilead Sciences Inc., balance sheet computation of aggregate accruals

US$ in millions

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Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Operating Assets
Total assets 62,125 63,171 67,952 68,407 61,627
Less: Cash and cash equivalents 6,085 5,412 5,338 5,997 11,631
Less: Short-term marketable debt securities 1,179 973 1,182 1,411 12,721
Operating assets 54,861 56,786 61,432 60,999 37,275
Operating Liabilities
Total liabilities 39,376 41,962 46,888 50,186 38,977
Less: Current portion of long-term debt and other obligations, net 1,798 2,273 1,516 2,757 2,499
Less: Long-term debt, net, excluding current portion 23,189 22,957 25,179 28,645 22,094
Operating liabilities 14,389 16,732 20,193 18,784 14,384
 
Net operating assets1 40,472 40,054 41,239 42,215 22,891
Balance-sheet-based aggregate accruals2 418 (1,185) (976) 19,324
Financial Ratio
Balance-sheet-based accruals ratio3 1.04% -2.92% -2.34% 59.36%
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
AbbVie Inc. -22.39% -14.27% -9.69% 131.82%
Amgen Inc. 57.08% 4.07% 0.70% 3.47%
Bristol-Myers Squibb Co. -7.12% -3.86% -13.40% -13.24%
Danaher Corp. 3.48% -1.55% 16.41% 52.50%
Eli Lilly & Co. 28.84% 11.38% 16.60% 18.42%
Johnson & Johnson -21.13% 19.84% 3.75% 7.76%
Merck & Co. Inc. 3.16% 0.46% 25.14% 15.90%
Moderna Inc. -55.45% 84.44% 536.93%
Pfizer Inc. 30.66% 24.95% -7.11% -14.91%
Regeneron Pharmaceuticals Inc. 1.17% 11.07% 43.54% 16.50%
Thermo Fisher Scientific Inc. 4.97% -1.78% 43.38% 1.98%
Balance-Sheet-Based Accruals Ratio, Sector
Pharmaceuticals, Biotechnology & Life Sciences 6.20% 5.69% 7.13% 20.29%
Balance-Sheet-Based Accruals Ratio, Industry
Health Care 7.31% 2.87% 6.05% 10.43%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

1 2023 Calculation
Net operating assets = Operating assets – Operating liabilities
= 54,86114,389 = 40,472

2 2023 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2023 – Net operating assets2022
= 40,47240,054 = 418

3 2023 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × 418 ÷ [(40,472 + 40,054) ÷ 2] = 1.04%

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, Gilead Sciences Inc. improved earnings quality from 2022 to 2023.

Cash-Flow-Statement-Based Accruals Ratio

Gilead Sciences Inc., cash flow statement computation of aggregate accruals

US$ in millions

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Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Net income attributable to Gilead 5,665 4,592 6,225 123 5,386
Less: Net cash provided by operating activities 8,006 9,072 11,384 8,168 9,144
Less: Net cash used in investing activities (2,265) (2,466) (3,131) (14,615) (7,817)
Cash-flow-statement-based aggregate accruals (76) (2,014) (2,028) 6,570 4,059
Financial Ratio
Cash-flow-statement-based accruals ratio1 -0.19% -4.95% -4.86% 20.18%
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
AbbVie Inc. -24.89% -16.25% -10.28% 44.98%
Amgen Inc. 52.47% 8.81% -12.87% 6.95%
Bristol-Myers Squibb Co. -5.99% -9.10% -12.73% -15.67%
Danaher Corp. 8.20% 1.44% 18.48% 42.90%
Eli Lilly & Co. 28.13% 10.32% 5.30% 11.38%
Johnson & Johnson 13.66% 10.78% 8.23% 17.00%
Merck & Co. Inc. 2.23% 0.61% 29.09% 13.75%
Moderna Inc. -71.99% 118.22% 626.00%
Pfizer Inc. 19.96% 18.46% 13.18% 3.27%
Regeneron Pharmaceuticals Inc. 14.35% 18.61% 49.24% 10.32%
Thermo Fisher Scientific Inc. 3.80% -0.06% 34.69% -0.89%
Cash-Flow-Statement-Based Accruals Ratio, Sector
Pharmaceuticals, Biotechnology & Life Sciences 8.31% 3.92% 9.39% 11.93%
Cash-Flow-Statement-Based Accruals Ratio, Industry
Health Care 7.75% 3.11% 7.13% 6.55%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

1 2023 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × -76 ÷ [(40,472 + 40,054) ÷ 2] = -0.19%

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, Gilead Sciences Inc. improved earnings quality from 2022 to 2023.