Change rate of non-current operating assets
factor.formula
Calculation formula:
Calculate the rate of change of non-liquid operating assets, where the numerator is the difference between the non-liquid operating assets of the current period and the non-liquid operating assets of the same period last year, and the denominator is the average total assets of the current period.
Among them, the calculation method of non-current operating assets is:
Non-current operating assets (NCOA_t) for the current period are approximately equal to non-current assets for the current period minus long-term investments for the current period. This calculation is intended to eliminate the impact of non-operating financial assets on non-current assets and focus more on non-current assets required for the actual operation of the enterprise.
The calculation method of average total assets is:
Average total assets (AvgTotalAssets_t) is the average of the total assets at the beginning of the period (TotalAssets_{t,begin}) and the total assets at the end of the period (TotalAssets_{t,end}). It is used to standardize the changes in non-liquid operating assets and eliminate the impact of differences in company size.
In the formula, the subscript t represents the current reporting period, and t-1 represents the same period of the previous year; the specific meanings of the variables are as follows:
- :
Non-current operating assets for the period.
- :
Non-current operating assets in the same period last year.
- :
Total non-current assets for the period.
- :
The total amount of long-term investment in this period includes long-term equity investment, long-term debt investment, etc.
- :
Average total assets for the period.
- :
Total assets at the beginning of this period.
- :
Total assets at the end of this period.
factor.explanation
Non-liquid operating assets mainly include intangible assets, fixed assets, and projects under construction. The valuation and accounting treatment of these assets are somewhat subjective, and there may be room for earnings management, so their reliability is relatively low. An increase in the rate of change of non-liquid operating assets is generally considered to reflect an increase in a company's investment in long-term assets, which may indicate the company's expectations for future growth, but there may also be risks of over-investment and mismanagement. Empirical studies have shown that there is a negative correlation between this factor and the company's future profitability and future stock returns, which means that over-investment in non-liquid operating assets may have a negative impact on the company's value and may lead to mispricing in the market. Therefore, investors should carefully evaluate the signals of this factor and conduct a comprehensive analysis in combination with other financial indicators.