Stock Analysis on Net

Johnson Controls International plc (NYSE:JCI)

This company has been moved to the archive! The financial data has not been updated since May 1, 2024.

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

Johnson Controls International plc, balance sheet computation of aggregate accruals

US$ in millions

Microsoft Excel
Sep 30, 2023 Sep 30, 2022 Sep 30, 2021 Sep 30, 2020 Sep 30, 2019 Sep 30, 2018
Operating Assets
Total assets 42,242 42,158 41,890 40,815 42,287 48,797
Less: Cash and cash equivalents 835 2,031 1,336 1,951 2,805 200
Operating assets 41,407 40,127 40,554 38,864 39,482 48,597
Operating Liabilities
Total liabilities 24,548 24,756 23,137 22,282 21,458 26,339
Less: Short-term debt 385 669 8 31 10 1,315
Less: Current portion of long-term debt 645 865 226 262 501 26
Less: Long-term debt, less current portion 7,818 7,426 7,506 7,526 6,708 9,654
Operating liabilities 15,700 15,796 15,397 14,463 14,239 15,344
 
Net operating assets1 25,707 24,331 25,157 24,401 25,243 33,253
Balance-sheet-based aggregate accruals2 1,376 (826) 756 (842) (8,010)
Financial Ratio
Balance-sheet-based accruals ratio3 5.50% -3.34% 3.05% -3.39% -27.39%
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
Boeing Co. -22.39% -12.09% 30.23% 75.78%
Caterpillar Inc. 9.40% 1.82% 4.22% -1.86%
Eaton Corp. plc 2.18% 2.87% 10.92% -8.45%
GE Aerospace -50.58% -7.82% -33.29% -8.79%
Honeywell International Inc. 7.21% -1.99% 9.04% 2.69%
Lockheed Martin Corp. 2.60% 15.67% 23.38% 5.01%
RTX Corp. -1.23% 1.57% 1.48% 18.38%
Balance-Sheet-Based Accruals Ratio, Sector
Capital Goods -5.90% -0.33% -0.06% 7.00% 200.00%
Balance-Sheet-Based Accruals Ratio, Industry
Industrials -2.04% 0.12% 3.77% 5.75% 200.00%

Based on: 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30).

1 2023 Calculation
Net operating assets = Operating assets – Operating liabilities
= 41,40715,700 = 25,707

2 2023 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2023 – Net operating assets2022
= 25,70724,331 = 1,376

3 2023 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × 1,376 ÷ [(25,707 + 24,331) ÷ 2] = 5.50%

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, Johnson Controls International plc deteriorated earnings quality from 2022 to 2023.

Cash-Flow-Statement-Based Accruals Ratio

Johnson Controls International plc, cash flow statement computation of aggregate accruals

US$ in millions

Microsoft Excel
Sep 30, 2023 Sep 30, 2022 Sep 30, 2021 Sep 30, 2020 Sep 30, 2019 Sep 30, 2018
Net income attributable to Johnson Controls 1,849 1,532 1,637 631 5,674 2,162
Less: Cash provided by operating activities from continuing operations 2,221 1,990 2,551 2,479 1,743 2,513
Less: Cash (used) provided by investing activities from continuing operations (1,184) (693) (1,090) (258) (533) 1,215
Cash-flow-statement-based aggregate accruals 812 235 176 (1,590) 4,464 (1,566)
Financial Ratio
Cash-flow-statement-based accruals ratio1 3.25% 0.95% 0.71% -6.41% 15.26%
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
Boeing Co. -26.69% -50.32% -43.09% 172.40%
Caterpillar Inc. 6.90% 3.26% 5.38% -4.23%
Eaton Corp. plc 8.52% 4.55% 7.52% -8.43%
GE Aerospace -8.42% -15.92% -53.22% -20.57%
Honeywell International Inc. 5.80% -0.79% 2.16% -1.79%
Lockheed Martin Corp. 3.08% -1.36% -10.24% 4.50%
RTX Corp. -1.66% 0.87% -1.96% -12.62%
Cash-Flow-Statement-Based Accruals Ratio, Sector
Capital Goods -0.94% -5.98% -13.86% -1.61% -15.76%
Cash-Flow-Statement-Based Accruals Ratio, Industry
Industrials 1.33% -4.47% -8.82% -2.05% -11.47%

Based on: 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30).

1 2023 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × 812 ÷ [(25,707 + 24,331) ÷ 2] = 3.25%

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, Johnson Controls International plc deteriorated earnings quality from 2022 to 2023.