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Kroger earnings quality score

How much of the reported profit is backed by cash, and how many markers of managed earnings the filings show

Score83 / 100 · grade A · rank 25 of 1027

Kroger (KR) scores 83 of 100 for earnings quality, grade A: rank 25 of 1027 companies and 4 of 48 in consumer-staples. It loses the most points on discretionary accruals of -2.9% of assets (modified Jones), smaller than most, Montier C-score 1 of 5 checks failed, accruals of -12.3% of assets, lower than 89% of companies (profit backed by cash). It earns full or near-full marks for Dechow F-score 0.69 (normal).

What earned and lost points

ComponentWhat the filings showPointsOf
Accrualsaccruals of -12.3% of assets, lower than 89% of companies (profit backed by cash)2731
Dechow F-scoreDechow F-score 0.69 (normal)2323
Montier C-scoreMontier C-score 1 of 5 checks failed1823
Discretionary accrualsdiscretionary accruals of -2.9% of assets (modified Jones), smaller than most815
Earnings smoothnessprofit steadier than cash flow (smoothness 0.57)68
KR: share of the available points, by componentKR: share of the available points, by componentAccruals89%Discretionary accruals54%Dechow F-score100%Montier C-score80%Earnings smoothness74%

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 → Kroger: 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.