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Stanley Black & Decker earnings quality score

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

Score62 / 100 · grade C · rank 640 of 1027

Stanley Black & Decker (SWK) scores 62 of 100 for earnings quality, grade C: rank 640 of 1027 companies and 144 of 287 in industrials. It loses the most points on accruals of -2.6% of assets, higher than 67% of companies (profit backed by cash), Montier C-score 2 of 5 checks failed, adjusted earnings 9% below GAAP. It earns full or near-full marks for profit steadier than cash flow (smoothness 0.57), Piotroski F-score 8 of 9.

What earned and lost points

ComponentWhat the filings showPointsOf
Accrualsaccruals of -2.6% of assets, higher than 67% of companies (profit backed by cash)1029
Montier C-scoreMontier C-score 2 of 5 checks failed1321
Discretionary accrualsdiscretionary accruals of +1.0% of assets (modified Jones), smaller than most1214
Piotroski F-scorePiotroski F-score 8 of 91314
Non-GAAP gapadjusted earnings 9% below GAAP1014
Earnings smoothnessprofit steadier than cash flow (smoothness 0.57)57
SWK: share of the available points, by componentSWK: share of the available points, by componentAccruals33%Discretionary accruals82%Montier C-score60%Piotroski F-score89%Non-GAAP gap70%Earnings smoothness75%

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.