Accruals ratio
A measure of the gap between profit and cash flow: how much of the profit rests on accruals rather than on cash received.
Formula
Stored as a fraction of one. Both components of the numerator are taken over the same period and under the same reporting standard.
How to read the number
A high value means profit is held up by management estimates rather than by cash, and such profit reproduces less well in the following year.
When the metric lies
Also known as: accruals