What is the accrual ratio?
The (balance-sheet) accrual ratio, popularized by accounting researcher Richard Sloan, measures how much of a company’s reported earnings come from accounting accruals rather than actual cash flow. A high accrual ratio can be a red flag for lower-quality, less sustainable earnings.
The formula
Accrual Ratio = (Net Operating Assets at End of Period − Net Operating Assets at Start of Period) / Average Net Operating Assets. Net operating assets are typically calculated as total assets minus cash and cash equivalents, minus total liabilities plus total debt.
This calculator is for general financial education and analysis practice. It is not investment advice, and a full earnings-quality assessment should consider many other factors.
Last reviewed August 2026