Stock Analysis on Net

ServiceNow Inc. (NYSE:NOW)

Financial Reporting Quality: Aggregate Accruals

Microsoft Excel

Balance-Sheet-Based Accruals Ratio

ServiceNow Inc., balance sheet computation of aggregate accruals

US$ in millions

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Operating Assets
Total assets 20,383 17,387 13,299 10,798 8,715
Less: Cash and cash equivalents 2,304 1,897 1,470 1,728 1,677
Less: Short-term investments 3,458 2,980 2,810 1,576 1,415
Operating assets 14,621 12,510 9,019 7,494 5,623
Operating Liabilities
Total liabilities 10,774 9,759 8,267 7,103 5,881
Less: Current debt, net 92
Less: Long-term debt, net, less current portion 1,489 1,488 1,486 1,484 1,640
Operating liabilities 9,285 8,271 6,781 5,527 4,240
 
Net operating assets1 5,336 4,239 2,238 1,967 1,383
Balance-sheet-based aggregate accruals2 1,097 2,001 271 584
Financial Ratio
Balance-sheet-based accruals ratio3 22.91% 61.79% 12.89% 34.89%
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
Accenture PLC 35.69% 16.32% 21.70% 27.93% 3.73%
Adobe Inc. -3.83% 1.85% -8.24% 14.14% 8.20%
Cadence Design Systems Inc. 39.84% 11.17% 26.65% 4.43%
CrowdStrike Holdings Inc.
International Business Machines Corp. 2.79% 2.42% 1.55% -7.39%
Intuit Inc. 3.35% -1.74% 85.68% 139.73% -1.39%
Microsoft Corp. 52.18% 22.96% 42.27% 40.52% 14.41%
Oracle Corp. 4.30% 51.77% 9.90% 5.62% 1.35%
Palantir Technologies Inc.
Palo Alto Networks Inc. 89.91% 137.01% -124.73% 85.21% 69.06%
Salesforce Inc. -2.46% -2.30% 57.74% 10.87% 65.87%
Synopsys Inc. 7.85% 13.85% 5.01% 0.36% 8.40%
Balance-Sheet-Based Accruals Ratio, Sector
Software & Services 0.00% 18.69% 29.34% 16.98%
Balance-Sheet-Based Accruals Ratio, Industry
Information Technology 0.00% 9.02% 18.05% 19.29%

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
= 14,6219,285 = 5,336

2 2024 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2024 – Net operating assets2023
= 5,3364,239 = 1,097

3 2024 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × 1,097 ÷ [(5,336 + 4,239) ÷ 2] = 22.91%

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, ServiceNow Inc. improved earnings quality from 2023 to 2024.

Cash-Flow-Statement-Based Accruals Ratio

ServiceNow Inc., cash flow statement computation of aggregate accruals

US$ in millions

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Net income 1,425 1,731 325 230 119
Less: Net cash provided by operating activities 4,267 3,398 2,723 2,191 1,787
Less: Net cash used in investing activities (2,501) (2,167) (2,583) (1,607) (1,507)
Cash-flow-statement-based aggregate accruals (341) 500 185 (354) (161)
Financial Ratio
Cash-flow-statement-based accruals ratio1 -7.12% 15.44% 8.80% -21.14%
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
Accenture PLC 24.31% -0.19% 11.87% 11.80% -13.65%
Adobe Inc. -21.90% -21.73% -19.93% 9.21% -0.48%
Cadence Design Systems Inc. 17.36% 3.78% 15.03% -5.75%
CrowdStrike Holdings Inc.
International Business Machines Corp. -3.73% 0.99% -7.22% -1.64%
Intuit Inc. -8.44% -8.74% 25.60% 58.72% -34.22%
Microsoft Corp. 30.89% 5.22% 13.42% 17.68% -8.19%
Oracle Corp. -1.01% 42.79% -30.58% 25.81% -31.35%
Palantir Technologies Inc.
Palo Alto Networks Inc. 33.84% -37.95% -196.64% -68.30% -488.47%
Salesforce Inc. -8.44% -8.49% 21.96% 10.57% -5.62%
Synopsys Inc. -7.64% 0.20% -4.64% -4.88% 0.92%
Cash-Flow-Statement-Based Accruals Ratio, Sector
Software & Services 0.00% 7.32% 2.04% 11.47%
Cash-Flow-Statement-Based Accruals Ratio, Industry
Information Technology 0.00% 1.41% 2.96% 8.76%

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 × -341 ÷ [(5,336 + 4,239) ÷ 2] = -7.12%

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, ServiceNow Inc. improved earnings quality from 2023 to 2024.