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SLB Limited earnings quality score

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

Score61 / 100 · grade C · rank 666 of 1027

SLB Limited (SLB) scores 61 of 100 for earnings quality, grade C: rank 666 of 1027 companies and 30 of 34 in energy. It loses the most points on Montier C-score 4 of 5 checks failed, accruals of -6.0% of assets, lower than 65% of companies (profit backed by cash), discretionary accruals of -4.0% of assets (modified Jones), larger than most. It earns full or near-full marks for Dechow F-score 0.63 (normal), profit about as variable as cash flow (smoothness 0.71).

What earned and lost points

ComponentWhat the filings showPointsOf
Accrualsaccruals of -6.0% of assets, lower than 65% of companies (profit backed by cash)1727
Dechow F-scoreDechow F-score 0.63 (normal)2020
Montier C-scoreMontier C-score 4 of 5 checks failed420
Discretionary accrualsdiscretionary accruals of -4.0% of assets (modified Jones), larger than most513
Non-GAAP gapadjusted earnings 13% below GAAP713
Earnings smoothnessprofit about as variable as cash flow (smoothness 0.71)77
SLB: share of the available points, by componentSLB: share of the available points, by componentAccruals64%Discretionary accruals40%Dechow F-score100%Montier C-score20%Non-GAAP gap56%Earnings smoothness100%

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 → SLB Limited: 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.