Stock Analysis on Net

FedEx Corp. (NYSE:FDX)

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

FedEx Corp., balance sheet computation of aggregate accruals

US$ in millions

Microsoft Excel
May 31, 2024 May 31, 2023 May 31, 2022 May 31, 2021 May 31, 2020 May 31, 2019
Operating Assets
Total assets 87,007 87,143 85,994 82,777 73,537 54,403
Less: Cash and cash equivalents 6,501 6,856 6,897 7,087 4,881 2,319
Operating assets 80,506 80,287 79,097 75,690 68,656 52,084
Operating Liabilities
Total liabilities 59,425 61,055 61,055 58,609 55,242 36,646
Less: Current portion of long-term debt 68 126 82 146 51 964
Less: Long-term debt, less current portion 20,135 20,453 20,182 20,733 21,952 16,617
Operating liabilities 39,222 40,476 40,791 37,730 33,239 19,065
 
Net operating assets1 41,284 39,811 38,306 37,960 35,417 33,019
Balance-sheet-based aggregate accruals2 1,473 1,505 346 2,543 2,398
Financial Ratio
Balance-sheet-based accruals ratio3 3.63% 3.85% 0.91% 6.93% 7.01%
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
Uber Technologies Inc. 21.78% -40.74% 31.28% 38.96%
Union Pacific Corp. 3.95% 3.63% 2.46% -1.44%
United Parcel Service Inc. 5.00% 21.85% 29.53% -18.06%
Balance-Sheet-Based Accruals Ratio, Sector
Transportation 0.00% 6.19% 1.14% 13.12% 2.52%
Balance-Sheet-Based Accruals Ratio, Industry
Industrials 0.00% -1.95% 0.18% 3.74% 5.63%

Based on: 10-K (reporting date: 2024-05-31), 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31).

1 2024 Calculation
Net operating assets = Operating assets – Operating liabilities
= 80,50639,222 = 41,284

2 2024 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2024 – Net operating assets2023
= 41,28439,811 = 1,473

3 2024 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × 1,473 ÷ [(41,284 + 39,811) ÷ 2] = 3.63%

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, FedEx Corp. improved earnings quality from 2023 to 2024.

Cash-Flow-Statement-Based Accruals Ratio

FedEx Corp., cash flow statement computation of aggregate accruals

US$ in millions

Microsoft Excel
May 31, 2024 May 31, 2023 May 31, 2022 May 31, 2021 May 31, 2020 May 31, 2019
Net income 4,331 3,972 3,826 5,231 1,286 540
Less: Cash provided by operating activities 8,312 8,848 9,832 10,135 5,097 5,613
Less: Cash used in investing activities (5,200) (6,174) (6,816) (6,010) (5,846) (5,473)
Cash-flow-statement-based aggregate accruals 1,219 1,298 810 1,106 2,035 400
Financial Ratio
Cash-flow-statement-based accruals ratio1 3.01% 3.32% 2.12% 3.01% 5.95%
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
Uber Technologies Inc. 10.31% -49.13% 6.66% -9.47%
Union Pacific Corp. 3.67% 2.53% 0.47% -1.22%
United Parcel Service Inc. 11.02% 17.11% 7.63% -18.35%
Cash-Flow-Statement-Based Accruals Ratio, Sector
Transportation 0.00% 6.13% -1.03% 3.50% -3.17%
Cash-Flow-Statement-Based Accruals Ratio, Industry
Industrials 0.00% 1.34% -4.38% -8.72% -2.05%

Based on: 10-K (reporting date: 2024-05-31), 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31).

1 2024 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × 1,219 ÷ [(41,284 + 39,811) ÷ 2] = 3.01%

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, FedEx Corp. improved earnings quality from 2023 to 2024.