Stock Analysis on Net

DuPont de Nemours Inc. (NYSE:DD)

This company has been moved to the archive! The financial data has not been updated since February 14, 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

DuPont de Nemours Inc., balance sheet computation of aggregate accruals

US$ in millions

Microsoft Excel
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Operating Assets
Total assets 69,396 188,030 192,164 79,511 68,026
Less: Cash and cash equivalents 1,540 13,482 13,438 6,607 8,577
Less: Marketable securities 134 956
Operating assets 67,856 174,414 177,770 72,904 59,449
Operating Liabilities
Total liabilities 27,840 91,851 90,237 52,282 41,843
Less: Short-term borrowings and finance lease obligations 3,830 2,802 4,015 907 995
Less: Long-term debt, excluding debt within one year 13,617 37,662 30,056 20,456 16,215
Operating liabilities 10,393 51,387 56,166 30,919 24,633
 
Net operating assets1 57,463 123,027 121,604 41,985 34,816
Balance-sheet-based aggregate accruals2 (65,564) 1,423 79,619 7,169
Financial Ratio
Balance-sheet-based accruals ratio3 -72.65% 1.16% 97.34% 18.67%
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
Linde plc
Balance-Sheet-Based Accruals Ratio, Industry
Materials 200.00%

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

1 2019 Calculation
Net operating assets = Operating assets – Operating liabilities
= 67,85610,393 = 57,463

2 2019 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2019 – Net operating assets2018
= 57,463123,027 = -65,564

3 2019 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × -65,564 ÷ [(57,463 + 123,027) ÷ 2] = -72.65%

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, DuPont de Nemours Inc. deteriorated earnings quality from 2018 to 2019.

Cash-Flow-Statement-Based Accruals Ratio

DuPont de Nemours Inc., cash flow statement computation of aggregate accruals

US$ in millions

Microsoft Excel
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Net income attributable to DuPont 498 3,844 1,460 4,318 7,685
Less: Cash provided by operating activities 1,409 4,731 8,695 5,478 7,516
Less: Cash (used for) provided by investing activities (2,313) (2,462) 4,274 (3,479) (1,350)
Cash-flow-statement-based aggregate accruals 1,402 1,575 (11,509) 2,319 1,519
Financial Ratio
Cash-flow-statement-based accruals ratio1 1.55% 1.29% -14.07% 6.04%
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
Linde plc
Cash-Flow-Statement-Based Accruals Ratio, Industry
Materials -10.53%

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

1 2019 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × 1,402 ÷ [(57,463 + 123,027) ÷ 2] = 1.55%

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, DuPont de Nemours Inc. deteriorated earnings quality from 2018 to 2019.