Stock Analysis on Net

lululemon athletica inc. (NASDAQ:LULU)

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

lululemon athletica inc., balance sheet computation of aggregate accruals

US$ in thousands

Microsoft Excel
Jan 28, 2024 Jan 29, 2023 Jan 30, 2022 Jan 31, 2021 Feb 2, 2020 Feb 3, 2019
Operating Assets
Total assets 7,091,941 5,607,038 4,942,478 4,185,215 3,281,354 2,084,711
Less: Cash and cash equivalents 2,243,971 1,154,867 1,259,871 1,150,517 1,093,505 881,320
Operating assets 4,847,970 4,452,171 3,682,607 3,034,698 2,187,849 1,203,391
Operating Liabilities
Total liabilities 2,859,860 2,458,239 2,202,432 1,626,649 1,329,136 638,736
Operating liabilities 2,859,860 2,458,239 2,202,432 1,626,649 1,329,136 638,736
 
Net operating assets1 1,988,110 1,993,932 1,480,175 1,408,049 858,713 564,655
Balance-sheet-based aggregate accruals2 (5,822) 513,757 72,126 549,336 294,058
Financial Ratio
Balance-sheet-based accruals ratio3 -0.29% 29.58% 4.99% 48.47% 41.32%
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
Nike Inc. -4.21% 4.57% 29.46% -2.48% 12.74%
Balance-Sheet-Based Accruals Ratio, Sector
Consumer Durables & Apparel 0.00% 7.74% 26.43% 3.32% 14.98%
Balance-Sheet-Based Accruals Ratio, Industry
Consumer Discretionary 0.00% 11.73% 12.34% 15.91% 5.08%

Based on: 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02), 10-K (reporting date: 2019-02-03).

1 2024 Calculation
Net operating assets = Operating assets – Operating liabilities
= 4,847,9702,859,860 = 1,988,110

2 2024 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2024 – Net operating assets2023
= 1,988,1101,993,932 = -5,822

3 2024 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × -5,822 ÷ [(1,988,110 + 1,993,932) ÷ 2] = -0.29%

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, lululemon athletica inc. improved earnings quality from 2023 to 2024.

Cash-Flow-Statement-Based Accruals Ratio

lululemon athletica inc., cash flow statement computation of aggregate accruals

US$ in thousands

Microsoft Excel
Jan 28, 2024 Jan 29, 2023 Jan 30, 2022 Jan 31, 2021 Feb 2, 2020 Feb 3, 2019
Net income 1,550,190 854,800 975,322 588,913 645,596 483,801
Less: Net cash provided by operating activities 2,296,164 966,463 1,389,108 803,336 669,316 742,779
Less: Net cash used in investing activities (654,132) (569,937) (427,891) (695,532) (278,408) (242,794)
Cash-flow-statement-based aggregate accruals (91,842) 458,274 14,105 481,109 254,688 (16,184)
Financial Ratio
Cash-flow-statement-based accruals ratio1 -4.61% 26.38% 0.98% 42.45% 35.79%
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
Nike Inc. -21.84% -11.14% 23.33% 32.56% 12.90%
Cash-Flow-Statement-Based Accruals Ratio, Sector
Consumer Durables & Apparel 0.00% -6.39% 20.56% 33.68% 14.69%
Cash-Flow-Statement-Based Accruals Ratio, Industry
Consumer Discretionary 0.00% 4.90% 1.96% 12.28% 3.83%

Based on: 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02), 10-K (reporting date: 2019-02-03).

1 2024 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × -91,842 ÷ [(1,988,110 + 1,993,932) ÷ 2] = -4.61%

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, lululemon athletica inc. improved earnings quality from 2023 to 2024.