Stock Analysis on Net

Halliburton Co. (NYSE:HAL)

This company has been moved to the archive! The financial data has not been updated since February 13, 2019.

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

Halliburton Co., balance sheet computation of aggregate accruals

US$ in millions

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Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Operating Assets
Total assets 25,982 25,085 27,000 36,942 32,240
Less: Cash and equivalents 2,008 2,337 4,009 10,077 2,291
Operating assets 23,974 22,748 22,991 26,865 29,949
Operating Liabilities
Total liabilities 16,438 16,736 17,552 21,447 15,942
Less: Short-term borrowings and current maturities of long-term debt 36 512 170 659 14
Less: Long-term debt, excluding current maturities 10,421 10,430 12,214 14,687 7,840
Operating liabilities 5,981 5,794 5,168 6,101 8,088
 
Net operating assets1 17,993 16,954 17,823 20,764 21,861
Balance-sheet-based aggregate accruals2 1,039 (869) (2,941) (1,097)
Financial Ratio
Balance-sheet-based accruals ratio3 5.95% -5.00% -15.24% -5.15%
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
Schlumberger Ltd.

Based on: 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), 10-K (reporting date: 2014-12-31).

1 2018 Calculation
Net operating assets = Operating assets – Operating liabilities
= 23,9745,981 = 17,993

2 2018 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2018 – Net operating assets2017
= 17,99316,954 = 1,039

3 2018 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × 1,039 ÷ [(17,993 + 16,954) ÷ 2] = 5.95%

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, Halliburton Co. deteriorated earnings quality from 2017 to 2018.

Cash-Flow-Statement-Based Accruals Ratio

Halliburton Co., cash flow statement computation of aggregate accruals

US$ in millions

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Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Net income (loss) attributable to company 1,656 (463) (5,763) (671) 3,500
Less: Cash flows provided by (used in) operating activities 3,157 2,468 (1,703) 2,906 4,062
Less: Cash flows used in investing activities (1,993) (1,927) (710) (2,192) (3,138)
Cash-flow-statement-based aggregate accruals 492 (1,004) (3,350) (1,385) 2,576
Financial Ratio
Cash-flow-statement-based accruals ratio1 2.82% -5.77% -17.36% -6.50%
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
Schlumberger Ltd.

Based on: 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), 10-K (reporting date: 2014-12-31).

1 2018 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × 492 ÷ [(17,993 + 16,954) ÷ 2] = 2.82%

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, Halliburton Co. improved earnings quality from 2017 to 2018.