Change rate of liquid operating assets
factor.formula
Change rate of liquid operating assets:
Liquid operating assets calculation formula:
Average total assets calculation formula:
in:
- :
Represents the total amount of liquid operating assets in the most recent reporting period (period t).
- :
Represents the total amount of liquid operating assets in the same period of the previous year (period t-1).
- :
Represents the average total assets during the reporting period (period t).
- :
Represents accounts receivable for the most recent reporting period (period t).
- :
Represents notes receivable for the most recent reporting period (period t).
- :
Represents prepayments for the most recent reporting period (period t).
- :
Represents other receivables in the most recent reporting period (period t).
- :
Represents the inventory in the most recent reporting period (period t).
- :
Represents the deferred expenses for the most recent reporting period (period t).
- :
Represents the total assets at the beginning of the reporting period (period t).
- :
Represents the total assets at the end of the reporting period (period t).
factor.explanation
The rate of change of liquid operating assets reflects the changes in the operating assets of an enterprise over a certain period of time, excluding financial assets such as cash and short-term investments, which are mainly composed of accounts receivable, notes receivable, prepayments, other receivables, inventories and deferred expenses. Since these items are subjective and flexible in accounting treatment and are easily affected by management's profit manipulation, this factor may capture subtle changes in the company's asset management, sales strategy or accounting policy. At the same time, studies have shown that there is a negative correlation between changes in liquid operating assets and the company's future profitability, which may lead to a certain degree of mispricing of the company's value by the market. This factor is mainly used to measure the efficiency of a company's working capital management and to assist in judging the company's future profitability.