Stock Analysis on Net

Walgreens Boots Alliance Inc. (NASDAQ:WBA)

This company has been moved to the archive! The financial data has not been updated since July 9, 2020.

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

Walgreens Boots Alliance Inc., balance sheet computation of aggregate accruals

US$ in millions

Microsoft Excel
Aug 31, 2019 Aug 31, 2018 Aug 31, 2017 Aug 31, 2016 Aug 31, 2015 Aug 31, 2014
Operating Assets
Total assets 67,598 68,124 66,009 72,688 68,782 37,182
Less: Cash and cash equivalents 1,023 785 3,301 9,807 3,000 2,646
Operating assets 66,575 67,339 62,708 62,881 65,782 34,536
Operating Liabilities
Total liabilities 43,447 41,435 37,735 42,407 37,482 16,621
Less: Short-term debt 5,738 1,966 251 323 1,068 774
Less: Long-term debt 11,098 12,431 12,684 18,705 13,315 3,736
Operating liabilities 26,611 27,038 24,800 23,379 23,099 12,111
 
Net operating assets1 39,964 40,301 37,908 39,502 42,683 22,425
Balance-sheet-based aggregate accruals2 (337) 2,393 (1,594) (3,181) 20,258
Financial Ratio
Balance-sheet-based accruals ratio3 -0.84% 6.12% -4.12% -7.74% 62.23%
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
Costco Wholesale Corp.
Dollar General Corp.
Target Corp.
Walmart Inc.
Balance-Sheet-Based Accruals Ratio, Sector
Consumer Staples Distribution & Retail 200.00%
Balance-Sheet-Based Accruals Ratio, Industry
Consumer Staples 200.00%

Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).

1 2019 Calculation
Net operating assets = Operating assets – Operating liabilities
= 66,57526,611 = 39,964

2 2019 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2019 – Net operating assets2018
= 39,96440,301 = -337

3 2019 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × -337 ÷ [(39,964 + 40,301) ÷ 2] = -0.84%

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, Walgreens Boots Alliance Inc. improved earnings quality from 2018 to 2019.

Cash-Flow-Statement-Based Accruals Ratio

Walgreens Boots Alliance Inc., cash flow statement computation of aggregate accruals

US$ in millions

Microsoft Excel
Aug 31, 2019 Aug 31, 2018 Aug 31, 2017 Aug 31, 2016 Aug 31, 2015 Aug 31, 2014
Net earnings attributable to Walgreens Boots Alliance, Inc. 3,982 5,024 4,078 4,173 4,220 1,932
Less: Net cash provided by operating activities 5,594 8,265 7,251 7,847 5,664 3,893
Less: Net cash used for investing activities (2,307) (5,501) (843) (3,517) (4,276) (1,731)
Cash-flow-statement-based aggregate accruals 695 2,260 (2,330) (157) 2,832 (230)
Financial Ratio
Cash-flow-statement-based accruals ratio1 1.73% 5.78% -6.02% -0.38% 8.70%
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
Costco Wholesale Corp.
Dollar General Corp.
Target Corp.
Walmart Inc.
Cash-Flow-Statement-Based Accruals Ratio, Sector
Consumer Staples Distribution & Retail 4.25%
Cash-Flow-Statement-Based Accruals Ratio, Industry
Consumer Staples -2.87%

Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).

1 2019 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × 695 ÷ [(39,964 + 40,301) ÷ 2] = 1.73%

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, Walgreens Boots Alliance Inc. improved earnings quality from 2018 to 2019.