Stock Analysis on Net

Time Warner Cable Inc. (NYSE:TWC)

This company has been moved to the archive! The financial data has not been updated since April 28, 2016.

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

Time Warner Cable Inc., balance sheet computation of aggregate accruals

US$ in millions

Microsoft Excel
Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011
Operating Assets
Total assets 49,277 48,501 48,273 49,809 48,276
Less: Cash and equivalents 1,170 707 525 3,304 5,177
Less: Short-term investments in U.S. Treasury securities 150
Operating assets 48,107 47,794 47,748 46,355 43,099
Operating Liabilities
Total liabilities 40,278 40,484 41,326 42,526 40,739
Less: Current maturities of long-term debt 5 1,017 1,767 1,518 2,122
Less: Long-term debt, excluding current maturities 22,497 22,701 23,285 25,171 24,320
Operating liabilities 17,776 16,766 16,274 15,837 14,297
 
Net operating assets1 30,331 31,028 31,474 30,518 28,802
Balance-sheet-based aggregate accruals2 (697) (446) 956 1,716
Financial Ratio
Balance-sheet-based accruals ratio3 -2.27% -1.43% 3.08% 5.79%
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
Alphabet Inc.
Comcast Corp.
Meta Platforms Inc.
Netflix Inc.
Walt Disney Co.

Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).

1 2015 Calculation
Net operating assets = Operating assets – Operating liabilities
= 48,10717,776 = 30,331

2 2015 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2015 – Net operating assets2014
= 30,33131,028 = -697

3 2015 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × -697 ÷ [(30,331 + 31,028) ÷ 2] = -2.27%

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, Time Warner Cable Inc. deteriorated earnings quality from 2014 to 2015.

Cash-Flow-Statement-Based Accruals Ratio

Time Warner Cable Inc., cash flow statement computation of aggregate accruals

US$ in millions

Microsoft Excel
Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011
Net income attributable to TWC shareholders 1,844 2,031 1,954 2,155 1,665
Less: Cash provided by operating activities 6,539 6,350 5,753 5,525 5,688
Less: Cash used by investing activities (4,345) (4,092) (3,476) (3,345) (3,530)
Cash-flow-statement-based aggregate accruals (350) (227) (323) (25) (493)
Financial Ratio
Cash-flow-statement-based accruals ratio1 -1.14% -0.73% -1.04% -0.08%
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
Alphabet Inc.
Comcast Corp.
Meta Platforms Inc.
Netflix Inc.
Walt Disney Co.

Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).

1 2015 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × -350 ÷ [(30,331 + 31,028) ÷ 2] = -1.14%

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, Time Warner Cable Inc. deteriorated earnings quality from 2014 to 2015.