Stock Analysis on Net

Monsanto Co. (NYSE:MON)

This company has been moved to the archive! The financial data has not been updated since April 5, 2018.

Financial Reporting Quality: Aggregate Accruals

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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

Monsanto Co., balance sheet computation of aggregate accruals

US$ in millions

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Aug 31, 2017 Aug 31, 2016 Aug 31, 2015 Aug 31, 2014 Aug 31, 2013 Aug 31, 2012
Operating Assets
Total assets 21,333 19,736 21,920 21,981 20,664 20,224
Less: Cash and cash equivalents 1,856 1,676 3,701 2,367 3,668 3,283
Less: Short-term investments 8 60 47 40 254 302
Operating assets 19,469 18,000 18,172 19,574 16,742 16,639
Operating Liabilities
Total liabilities 14,875 15,191 14,915 14,067 7,936 8,188
Less: Short-term debt, including current portion of long-term debt 870 1,587 615 233 51 36
Less: Long-term debt, excluding current portion 7,254 7,453 8,429 7,528 2,061 2,038
Operating liabilities 6,751 6,151 5,871 6,306 5,824 6,114
 
Net operating assets1 12,718 11,849 12,301 13,268 10,918 10,525
Balance-sheet-based aggregate accruals2 869 (452) (967) 2,350 393
Financial Ratio
Balance-sheet-based accruals ratio3 7.07% -3.74% -7.56% 19.43% 3.67%
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
lululemon athletica inc.
Nike Inc.

Based on: 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31), 10-K (reporting date: 2013-08-31), 10-K (reporting date: 2012-08-31).

1 2017 Calculation
Net operating assets = Operating assets – Operating liabilities
= 19,4696,751 = 12,718

2 2017 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2017 – Net operating assets2016
= 12,71811,849 = 869

3 2017 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × 869 ÷ [(12,718 + 11,849) ÷ 2] = 7.07%

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, Monsanto Co. deteriorated earnings quality from 2016 to 2017.

Cash-Flow-Statement-Based Accruals Ratio

Monsanto Co., cash flow statement computation of aggregate accruals

US$ in millions

Microsoft Excel
Aug 31, 2017 Aug 31, 2016 Aug 31, 2015 Aug 31, 2014 Aug 31, 2013 Aug 31, 2012
Net income attributable to Monsanto Company 2,260 1,336 2,314 2,740 2,482 2,045
Less: Net cash provided by operating activities 3,226 2,588 3,108 3,054 2,740 3,051
Less: Net cash required by investing activities (1,107) (864) (1,019) (2,095) (777) (1,034)
Cash-flow-statement-based aggregate accruals 141 (388) 225 1,781 519 28
Financial Ratio
Cash-flow-statement-based accruals ratio1 1.15% -3.21% 1.76% 14.73% 4.84%
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
lululemon athletica inc.
Nike Inc.

Based on: 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31), 10-K (reporting date: 2013-08-31), 10-K (reporting date: 2012-08-31).

1 2017 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × 141 ÷ [(12,718 + 11,849) ÷ 2] = 1.15%

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, Monsanto Co. improved earnings quality from 2016 to 2017.