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
Cash-Flow-Statement-Based Accruals Ratio

Schlumberger Ltd., balance sheet computation of aggregate accruals

US$ in millions

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Operating Assets
Total assets	48,935)	47,957)	43,135)	41,511)	42,434)
Less: Cash	3,544)	2,900)	1,655)	1,757)	844)
Less: Short-term investments	1,125)	1,089)	1,239)	1,382)	2,162)
Operating assets	44,266)	43,968)	40,241)	38,372)	39,428)
Operating Liabilities
Total liabilities	26,585)	26,598)	25,146)	26,225)	29,945)
Less: Short-term borrowings and current portion of long-term debt	1,051)	1,123)	1,632)	909)	850)
Less: Long-term debt, excluding current portion	11,023)	10,842)	10,594)	13,286)	16,036)
Operating liabilities	14,511)	14,633)	12,920)	12,030)	13,059)

Net operating assets¹	29,755)	29,335)	27,321)	26,342)	26,369)
Balance-sheet-based aggregate accruals²	420)	2,014)	979)	(27)	—)
Financial Ratio
Balance-sheet-based accruals ratio³	1.42%	7.11%	3.65%	-0.10%	—
Benchmarks
Balance-Sheet-Based Accruals Ratio, Industry
Energy	0.00%	4.84%	-0.61%	-0.16%	—

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

¹ 2024 Calculation
Net operating assets = Operating assets – Operating liabilities
= 44,266 – 14,511 = 29,755

² 2024 Calculation
Balance-sheet-based aggregate accruals = Net operating assets₂₀₂₄ – Net operating assets₂₀₂₃
= 29,755 – 29,335 = 420

³ 2024 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × 420 ÷ [(29,755 + 29,335) ÷ 2] = 1.42%

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, Schlumberger Ltd. improved earnings quality from 2023 to 2024.

Schlumberger Ltd., cash flow statement computation of aggregate accruals

US$ in millions

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Net income (loss) attributable to SLB	4,461)	4,203)	3,441)	1,881)	(10,518)
Less: Net cash provided by operating activities	6,602)	6,637)	3,720)	4,651)	2,944)
Less: Net cash used in investing activities	(3,145)	(2,783)	(1,388)	(919)	(2,353)
Cash-flow-statement-based aggregate accruals	1,004)	349)	1,109)	(1,851)	(11,109)
Financial Ratio
Cash-flow-statement-based accruals ratio¹	3.40%	1.23%	4.13%	-7.02%	—
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Industry
Energy	0.00%	0.69%	-1.32%	-6.12%	—

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

¹ 2024 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × 1,004 ÷ [(29,755 + 29,335) ÷ 2] = 3.40%

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, Schlumberger Ltd. deteriorated earnings quality from 2023 to 2024.

Schlumberger Ltd. (NYSE:SLB)

Financial Reporting Quality: Aggregate Accruals

Balance-Sheet-Based Accruals Ratio

Cash-Flow-Statement-Based Accruals Ratio