Accrual Ratio Calculator (Balance Sheet and Cash Flow)

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Total assets minus cash and cash equivalents at the start of the period. Also called non-cash operating assets.
USD
Total liabilities minus total financial debt (interest-bearing) at the start of the period.
USD
Total assets minus cash and cash equivalents at the end of the period.
USD
Total liabilities minus total financial debt (interest-bearing) at the end of the period.
USD
Reported net income (after tax) for the period.
USD
Operating cash flow from the cash flow statement. Can be negative.
USD
Investing cash flow from the cash flow statement. Typically negative (capital expenditures). Enter with the sign as reported.
USD
BS Accrual RatioLow earnings quality
15.6%

Balance sheet accrual ratio: change in NOA divided by average NOA

Beginning NOA650,000USD
Ending NOA760,000USD
Average NOA705,000USD
CF Accrual Ratio0.08%
BS Accruals (unscaled)110,000USD
CF Accruals (unscaled)55,000USD
15.6% %
High quality<-10%Good quality-10%-0%Moderate0%-10%Low quality10%-25%Poor quality25%+

Earnings quality warrants scrutiny: the balance sheet ratio is 15.6%, above the +10% warning threshold.

  • A ratio above +10% suggests reported profits are increasingly driven by accruals rather than cash. Scrutinise receivables, inventory, and deferred items.
  • The cash flow accrual ratio is 7.8%, which confirms the balance sheet reading. When both methods agree, confidence in the signal is higher.
  • Compare the ratio year-over-year: a ratio that is rising consistently is a more reliable red flag than a single high-accrual period.

Next stepInvestigate which specific balance sheet items are driving the increase in net operating assets: growing receivables, swelling inventories, and expanding prepaid expenses are the most common culprits.

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