Stock Analysis on Net

Super Micro Computer Inc. (NASDAQ:SMCI)

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

Super Micro Computer Inc., balance sheet computation of aggregate accruals

US$ in thousands

Microsoft Excel
Jun 30, 2024 Jun 30, 2023 Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019
Operating Assets
Total assets 9,826,092 3,674,729 3,205,077 2,241,964 1,918,646 1,682,594
Less: Cash and cash equivalents 1,669,766 440,459 267,397 232,266 210,533 248,164
Operating assets 8,156,326 3,234,270 2,937,680 2,009,698 1,708,113 1,434,430
Operating Liabilities
Total liabilities 4,408,722 1,702,559 1,779,330 1,145,566 852,939 741,418
Less: Lines of credit and current portion of term loans 402,346 170,123 449,146 63,490 23,704 23,647
Less: Term loans, non-current 74,083 120,179 147,618 34,700 5,697
Less: Convertible notes 1,697,716
Operating liabilities 2,234,577 1,412,257 1,182,566 1,047,376 823,538 717,771
 
Net operating assets1 5,921,749 1,822,013 1,755,114 962,322 884,575 716,659
Balance-sheet-based aggregate accruals2 4,099,736 66,899 792,792 77,747 167,916
Financial Ratio
Balance-sheet-based accruals ratio3 105.88% 3.74% 58.35% 8.42% 20.97%
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
Apple Inc. -12.64% -9.04% -2.12% 36.09% -11.31%
Arista Networks Inc. -26.64% 17.14% 106.22% 24.14%
Cisco Systems Inc. 75.07% -12.09% 5.96% 20.24% -7.26%
Dell Technologies Inc. -9.55% 12.16% -89.81% -10.71%
Balance-Sheet-Based Accruals Ratio, Sector
Technology Hardware & Equipment 11.96% -6.96% -13.35% 22.01% 200.00%
Balance-Sheet-Based Accruals Ratio, Industry
Information Technology 21.52% 8.96% 18.15% 19.20% 200.00%

Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).

1 2024 Calculation
Net operating assets = Operating assets – Operating liabilities
= 8,156,3262,234,577 = 5,921,749

2 2024 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2024 – Net operating assets2023
= 5,921,7491,822,013 = 4,099,736

3 2024 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × 4,099,736 ÷ [(5,921,749 + 1,822,013) ÷ 2] = 105.88%

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, Super Micro Computer Inc. deteriorated earnings quality from 2023 to 2024.

Cash-Flow-Statement-Based Accruals Ratio

Super Micro Computer Inc., cash flow statement computation of aggregate accruals

US$ in thousands

Microsoft Excel
Jun 30, 2024 Jun 30, 2023 Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019
Net income 1,152,666 639,998 285,163 111,865 84,308 71,918
Less: Net cash provided by (used in) operating activities (2,485,972) 663,580 (440,801) 122,955 (30,334) 262,554
Less: Net cash used in investing activities (194,248) (39,486) (46,282) (58,016) (43,588) (24,849)
Cash-flow-statement-based aggregate accruals 3,832,886 15,904 772,246 46,926 158,230 (165,787)
Financial Ratio
Cash-flow-statement-based accruals ratio1 98.99% 0.89% 56.84% 5.08% 19.76%
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
Apple Inc. -25.90% -14.62% 0.00% 4.86% -20.46%
Arista Networks Inc. 82.06% 36.37% 52.90% 147.50%
Cisco Systems Inc. 46.78% -7.65% -10.18% 1.64% -32.20%
Dell Technologies Inc. -15.65% 11.23% -20.97% -17.42%
Cash-Flow-Statement-Based Accruals Ratio, Sector
Technology Hardware & Equipment -2.79% -10.03% -4.10% -0.72% -32.83%
Cash-Flow-Statement-Based Accruals Ratio, Industry
Information Technology 6.37% 1.46% 2.95% 8.70% -15.55%

Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).

1 2024 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × 3,832,886 ÷ [(5,921,749 + 1,822,013) ÷ 2] = 98.99%

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, Super Micro Computer Inc. deteriorated earnings quality from 2023 to 2024.