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Toll Brothers earnings quality score
How much of the reported profit is backed by cash, and how many markers of managed earnings the filings show
Score44 / 100 · grade D · rank 934 of 1027
Toll Brothers (TOL) scores 44 of 100 for earnings quality, grade D: rank 934 of 1027 companies and 242 of 287 in industrials. It loses the most points on accruals of +1.7% of assets, higher than 92% of companies, discretionary accruals of +3.7% of assets (modified Jones), larger than most, adjusted earnings 4% below GAAP. It earns full or near-full marks for profit about as variable as cash flow (smoothness 1.17).
What earned and lost points
| Component | What the filings show | Points | Of |
|---|---|---|---|
| Accruals | accruals of +1.7% of assets, higher than 92% of companies | 4 | 44 |
| Discretionary accruals | discretionary accruals of +3.7% of assets (modified Jones), larger than most | 10 | 22 |
| Non-GAAP gap | adjusted earnings 4% below GAAP | 20 | 22 |
| Earnings smoothness | profit about as variable as cash flow (smoothness 1.17) | 11 | 11 |
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.