Close Navigation
.

Accrual Ratio

Trading Term

The accrual ratio compares a company’s accounting earnings with the cash generated by its operations. It helps investors identify how much reported profit comes from noncash items, estimates, or changes in working capital.

A persistently high accrual ratio may indicate weaker earnings quality because profits are not converting efficiently into cash. Investors often examine the ratio over several periods and compare it with industry peers.

IBKR Campus Newsletters

This website uses cookies to collect usage information in order to offer a better browsing experience. By browsing this site or by clicking on the "ACCEPT COOKIES" button you accept our Cookie Policy.