标题: Aggregate Accruals Ratio [打印本页] 作者: svgleeson 时间: 2011-7-13 16:27 标题: Aggregate Accruals Ratio
What is the ratio actually telling us? Lower is better from my understanding.作者: sameeragarwal 时间: 2011-7-13 16:27
Lower the better for both ratios.
Basically its reported income minus cash actually collected. A huge amount of Income with no cash coming in is a cause for concern.作者: senlinlang 时间: 2011-7-13 16:27
Thanks. Would it be correct to say that a higher AA ratio could be cause for concern because it allows for mgmt to manipulate earnings more so?作者: mengxu 时间: 2011-7-13 16:27
Yes, the section talks about Cash being more persistent(trustworthy) and the accrual section more likely to reverse in the future. So low depreciation expense to increase earning early on will eventually reverse in the end.
