How is accruals linked to the change in net operating assets? Can someone help explain thanks!
Cash-flow based accrual ratio = (NI - CFO - CFI)/Average NOA
Balance sheet based accrual ratio = (NOAt - NOAt-1)/Average NOA
Where NOA = Assets - Cash & cash equivalents + Liabilities - Total debt
Net operating assets (NOA) is the difference between operating assets and operating liabilities
NOA : (total assets – cash) – (total liabilities – total debt)