audit earning-quality

Earnings quality — is the profit real cash or paper numbers?

When to use

Buffett: "Earnings are not cash." Verify whether a company's profits are backed by actual cash flow.

Quick Start

# Full earnings quality report
audit earning-quality

# Only last 5 years
audit earning-quality --years 2020-2024

Command

audit earning-quality [--years xxxx-yyyy] [--period q1|h1|9m|annual] [--help]

Parameter	Description	Default
`--years`	Year range	All years
`--period`	Fiscal period	annual

Core Metrics

Metric	Formula	Meaning
Accruals Ratio		Divergence between profit and cash
Cash Conversion		Cash generated per dollar of profit
FCF Conversion		Cash after CapEx per dollar of profit

Key signals:

Accruals negative → good (OCF > NI, more cash than profit)
Accruals positive → bad (NI > OCF, profit may be inflated)
Cash Conversion > 80% → strong
FCF Conversion > 80% → excellent quality

Advisory

Accruals Ratio

Status	Threshold
`[+]`	Negative (OCF > NI)
`[-]`	Positive (NI > OCF)

Cash Conversion

Status	Threshold
`[+]`	> 80%
`[~]`	50-80%
`[-]`	< 50%

FCF Conversion

Status	Threshold
`[+]`	> 80%
`[~]`	30-80%
`[-]`	< 30%

Field IDs

Name	Industrial	Banking	Insurance
Net Income to Common Stockholders	income:1145	income:2148	income:3150
Operating Cash Flow	cash_flow:1201	cash_flow:2201	cash_flow:3201
Free Cash Flow	cash_flow:1240	cash_flow:2243	cash_flow:3246
Total Assets	balance_sheet:1301	balance_sheet:2301	balance_sheet:3301

Industry Routing

All industries (industrial, banking, insurance) use the same metrics.

Output Example

EARNING QUALITY

TICKER: [US.AAPL - Apple Inc.]
PERIOD: [2020-ANNUAL ~ 2024-ANNUAL]

[+] Accruals Ratio: -2.3% (OCF > NI, excellent cash generation)
[+] Cash Conversion: 116% (> 80% = strong)
[+] FCF Conversion: 103% (> 80% = excellent quality)

Metric                    Value
-------------------------------
Avg Accruals Ratio       -2.3%
Avg Cash Conversion     116%
Avg FCF Conversion      103%
Cash Conv Stability      8.2%

Period        Net Income     OCF     FCF  Accruals  Cash Conv  FCF Conv
------------------------------------------------------------------------
2020 ANNUAL     57.41B   80.67B  73.36B     -3.8%     140.5%    127.8%
...

Commands