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American Water Works Company earnings quality score
How much of the reported profit is backed by cash, and how many markers of managed earnings the filings show
Score69 / 100 · grade B · rank 366 of 1027
American Water Works Company (AWK) scores 69 of 100 for earnings quality, grade B: rank 366 of 1027 companies and 20 of 55 in utilities. It loses the most points on accruals of -2.8% of assets, higher than 65% of companies (profit backed by cash), Montier C-score 2 of 5 checks failed, discretionary accruals of +2.4% of assets (modified Jones), smaller than most. It earns full or near-full marks for adjusted earnings 1% below GAAP, Dechow F-score 0.38 (normal), profit about as variable as cash flow (smoothness 0.95).
What earned and lost points
| Component | What the filings show | Points | Of |
|---|---|---|---|
| Accruals | accruals of -2.8% of assets, higher than 65% of companies (profit backed by cash) | 9 | 27 |
| Dechow F-score | Dechow F-score 0.38 (normal) | 20 | 20 |
| Montier C-score | Montier C-score 2 of 5 checks failed | 12 | 20 |
| Discretionary accruals | discretionary accruals of +2.4% of assets (modified Jones), smaller than most | 8 | 13 |
| Non-GAAP gap | adjusted earnings 1% below GAAP | 13 | 13 |
| Earnings smoothness | profit about as variable as cash flow (smoothness 0.95) | 7 | 7 |
How the score is built
Eight published measures, each scored against the whole universe or on its own scale and weighted: accruals 20, discretionary accruals 10, Beneish M 15, Dechow F 15, Montier C 15, Piotroski F 10, the non-GAAP gap 10, smoothness 5. A measure that cannot be computed (Beneish for a bank, say) drops out and the rest is rescaled, so every company is scored on what applies to it.
Every company ranked → The full quality workbench, live → American Water Works Company: cash flow →
Computed from the companies’ own XBRL filings (latest fiscal year) by published formulas; a statistical screen, not an audit or an accusation. A low score means the reported profit shows more of the markers of managed or low-quality earnings than its peers. Not investment advice.