Formula for accruals

Hi,

For those of you with a better understanding of Accounting than me is it possible to code for accruals in P123?

Thank you

Scott

We have a built-in formula for accruals: MScoreTATA, which is the ratio of total accruals to total assets. If you want the accruals alone, you have three options. The first two should be equivalent (they usually are, but not always, and I don’t know why there are occasional exceptions). The third is based on the balance sheet rather than the cash flow statement, and gives you very different numbers. The CFA Institute uses both.

MScoreTATA * AstTotQ

NetIncBXorTTM - OperCashFlTTM

AstTotTTM - CashEquivTTM - LiabTotTTM + DbtTotTTM - AstTotPTM + CashEquivPTM + LiabTotPTM - DbtTotPTM

This last is the change in net operating income, which was the subject of a blog post here: https://blog.portfolio123.com/2020/01/22/my-favorite-balance-sheet-ratio/

You are the master Yuval !!! :slight_smile:

Yuval,

Thank you very much

Scott

Should the TTM be Q and PTM be PYQ? as balance sheet numbers are snapshot in time.

I seem to remember that the CFA Institute uses the average over the past year and the average over the year before (TTM and PTM) rather than using the quarterly snapshot, but I can no longer find this on their website. Either one should work.

Thanks Yuval.