$ISRG today’s announcement of 10-K gives a picture of the firm’s past year performance. A company may report high earnings but actually have low cash flows. This difference is called "accruals", which represents a firm’s estimation of future financial benefits and obligations. see: financial-education-hub.com.... However, managers may make mistakes intentionally or unintentionally in the estimation, making the realization of accruals inconsistent with cash flows. From this perspective, the higher accruals in a firm’s reported earnings, the more likely it will record poor future earnings. If you want to estimate the quality of $ISRG ’s earnings to be released, you can calculate its accruals level, and the portion that may not be able to be realized in cash flows. For the method, please see: financial-education-hub.com....
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