Stock Analysis on Net

United Rentals Inc. (NYSE:URI)

This company has been moved to the archive! The financial data has not been updated since January 25, 2023.

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

United Rentals Inc., balance sheet computation of aggregate accruals

US$ in millions

Microsoft Excel
Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018
Operating Assets
Total assets 24,183 20,292 17,868 18,970 18,133
Less: Cash and cash equivalents 106 144 202 52 43
Operating assets 24,077 20,148 17,666 18,918 18,090
Operating Liabilities
Total liabilities 17,121 14,301 13,323 15,140 14,730
Less: Short-term debt and current maturities of long-term debt 161 906 704 997 903
Less: Long-term debt, excluding current maturities 11,209 8,779 8,978 10,431 10,844
Operating liabilities 5,751 4,616 3,641 3,712 2,983
 
Net operating assets1 18,326 15,532 14,025 15,206 15,107
Balance-sheet-based aggregate accruals2 2,794 1,507 (1,181) 99
Financial Ratio
Balance-sheet-based accruals ratio3 16.50% 10.20% -8.08% 0.65%
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
Boeing Co. -12.09% 30.23% 75.78%
Caterpillar Inc. 1.82% 4.22% -1.86%
Eaton Corp. plc 2.87% 10.92% -8.45%
GE Aerospace -7.82% -33.29% -8.79%
Honeywell International Inc. -1.99% 9.04% 2.69%
Lockheed Martin Corp. 15.67% 23.38% 5.01%
RTX Corp. 1.57% 1.48% 18.38%
Balance-Sheet-Based Accruals Ratio, Sector
Capital Goods -0.33% -0.06% 7.00% 200.00%
Balance-Sheet-Based Accruals Ratio, Industry
Industrials 0.12% 3.77% 5.75% 200.00%

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

1 2022 Calculation
Net operating assets = Operating assets – Operating liabilities
= 24,0775,751 = 18,326

2 2022 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2022 – Net operating assets2021
= 18,32615,532 = 2,794

3 2022 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × 2,794 ÷ [(18,326 + 15,532) ÷ 2] = 16.50%

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, United Rentals Inc. deteriorated earnings quality from 2021 to 2022.

Cash-Flow-Statement-Based Accruals Ratio

United Rentals Inc., cash flow statement computation of aggregate accruals

US$ in millions

Microsoft Excel
Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018
Net income 2,105 1,386 890 1,174 1,096
Less: Net cash provided by operating activities 4,433 3,689 2,658 3,024 2,853
Less: Net cash used in investing activities (5,016) (3,611) (223) (1,710) (4,551)
Cash-flow-statement-based aggregate accruals 2,688 1,308 (1,545) (140) 2,794
Financial Ratio
Cash-flow-statement-based accruals ratio1 15.88% 8.85% -10.57% -0.92%
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
Boeing Co. -50.32% -43.09% 172.40%
Caterpillar Inc. 3.26% 5.38% -4.23%
Eaton Corp. plc 4.55% 7.52% -8.43%
GE Aerospace -15.92% -53.22% -20.57%
Honeywell International Inc. -0.79% 2.16% -1.79%
Lockheed Martin Corp. -1.36% -10.24% 4.50%
RTX Corp. 0.87% -1.96% -12.62%
Cash-Flow-Statement-Based Accruals Ratio, Sector
Capital Goods -5.98% -13.86% -1.61% -15.76%
Cash-Flow-Statement-Based Accruals Ratio, Industry
Industrials -4.47% -8.82% -2.05% -11.47%

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

1 2022 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × 2,688 ÷ [(18,326 + 15,532) ÷ 2] = 15.88%

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, United Rentals Inc. deteriorated earnings quality from 2021 to 2022.