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Reynolds Consumer Products earnings quality score

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

Score66 / 100 · grade B · rank 514 of 1027

Reynolds Consumer Products (REYN) scores 66 of 100 for earnings quality, grade B: rank 514 of 1027 companies and 55 of 82 in materials. It loses the most points on accruals of -3.6% of assets, higher than 56% of companies (profit backed by cash), Montier C-score 2 of 6 checks failed, profit far steadier than cash flow (smoothness 0.23). It earns full or near-full marks for discretionary accruals of +0.7% of assets (modified Jones), smaller than most, Beneish M-score -2.53: clean (below −2.22).

What earned and lost points

ComponentWhat the filings showPointsOf
Accrualsaccruals of -3.6% of assets, higher than 56% of companies (profit backed by cash)920
Beneish M-scoreBeneish M-score -2.53: clean (below −2.22)1515
Dechow F-scoreDechow F-score 1.43 (above normal)1015
Montier C-scoreMontier C-score 2 of 6 checks failed1015
Discretionary accrualsdiscretionary accruals of +0.7% of assets (modified Jones), smaller than most910
Piotroski F-scorePiotroski F-score 5 of 9610
Non-GAAP gapadjusted earnings 8% below GAAP710
Earnings smoothnessprofit far steadier than cash flow (smoothness 0.23)05
REYN: share of the available points, by componentREYN: share of the available points, by componentAccruals44%Discretionary accruals87%Beneish M-score100%Dechow F-score70%Montier C-score67%Piotroski F-score56%Non-GAAP gap72%Earnings smoothness6%

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.

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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.