Factors Directory

Quantitative Trading Factors

Deviation of advance payments (quarter-on-quarter)

Fundamental factors

factor.formula

Calculation formula for deviation of advance payments (quarter-on-quarter):

Revenue growth multiplier calculation formula:

The meaning of each parameter in the formula:

  • :

    The balance of advances received at the end of the current reporting period. Advances received are payments received from customers before a company provides goods or services and are considered a liability.

  • :

    The balance of advances received at the end of the reporting period in the previous year. Used for comparison to measure the year-on-year change in advances received.

  • :

    The revenue growth multiplier is used to measure the normal growth level of a company's revenue. This value is calculated based on the cash received from the sale of goods and provision of services in the most recent quarter and the same period last year. It can more truly reflect the growth of the company's main business.

  • :

    Total assets at the end of the current reporting period. Used as a denominator to normalize deviations from prepayments to make them comparable across companies of different sizes.

  • :

    Cash flow from sales of goods and provision of services in the most recent quarter. This data comes directly from the cash flow statement and can reflect the actual cash inflow from the company's main business in the current period.

  • :

    Cash flow from the sale of goods and services in the same period last year. Used for comparison, to measure the year-on-year change in a company's revenue, and to calculate the revenue growth multiplier.

factor.explanation

The deviation of advance payments (quarterly comparison) can reflect the bargaining power and potential earnings management behavior of the company in the supply chain by measuring the deviation of the current advance payments from its normal growth level. A positive deviation may mean that the company has strong demand or profit manipulation, while a negative deviation may mean that the company's sales are weak or there has been earnings smoothing behavior. This indicator should be used in conjunction with other financial indicators for a more comprehensive risk assessment and financial analysis. For example, combining it with accounts receivable turnover rate, revenue growth rate, etc. can more effectively identify earnings management and risk signals.

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