Stock Analysis on Net

Kraft Foods Group Inc. (NASDAQ:KRFT)

This company has been moved to the archive! The financial data has not been updated since April 28, 2015.

Financial Reporting Quality: Aggregate Accruals 

Microsoft Excel

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

Kraft Foods Group Inc., balance sheet computation of aggregate accruals

US$ in millions

Microsoft Excel
Dec 27, 2014 Dec 28, 2013 Dec 29, 2012
Operating Assets
Total assets 22,947 23,148 23,329
Less: Cash and cash equivalents 1,293 1,686 1,255
Operating assets 21,654 21,462 22,074
Operating Liabilities
Total liabilities 18,582 17,961 19,757
Less: Current portion of long-term debt 1,405 4 5
Less: Long-term debt, excluding current portion 8,627 9,976 9,966
Operating liabilities 8,550 7,981 9,786
 
Net operating assets1 13,104 13,481 12,288
Balance-sheet-based aggregate accruals2 (377) 1,193
Financial Ratio
Balance-sheet-based accruals ratio3 -2.84% 9.26%
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
lululemon athletica inc.
Nike Inc.

Based on: 10-K (reporting date: 2014-12-27), 10-K (reporting date: 2013-12-28), 10-K (reporting date: 2012-12-29).

1 2014 Calculation
Net operating assets = Operating assets – Operating liabilities
= 21,6548,550 = 13,104

2 2014 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2014 – Net operating assets2013
= 13,10413,481 = -377

3 2014 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × -377 ÷ [(13,104 + 13,481) ÷ 2] = -2.84%

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, Kraft Foods Group Inc. improved earnings quality from 2013 to 2014.

Cash-Flow-Statement-Based Accruals Ratio

Kraft Foods Group Inc., cash flow statement computation of aggregate accruals

US$ in millions

Microsoft Excel
Dec 27, 2014 Dec 28, 2013 Dec 29, 2012
Net earnings 1,043 2,715 1,642
Less: Net cash provided by operating activities 2,020 2,043 3,035
Less: Net cash used in investing activities (535) (426) (422)
Cash-flow-statement-based aggregate accruals (442) 1,098 (971)
Financial Ratio
Cash-flow-statement-based accruals ratio1 -3.33% 8.52%
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
lululemon athletica inc.
Nike Inc.

Based on: 10-K (reporting date: 2014-12-27), 10-K (reporting date: 2013-12-28), 10-K (reporting date: 2012-12-29).

1 2014 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × -442 ÷ [(13,104 + 13,481) ÷ 2] = -3.33%

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, Kraft Foods Group Inc. improved earnings quality from 2013 to 2014.