The balance-sheet version measures the change in net operating assets over average assets. Either way, a high positive reading means profit is running ahead of cash, which historically precedes disappointment and restatement more often than chance would suggest.
It is a screen, not a verdict. Fast-growing companies legitimately build working capital, so pair the ratio with growth and with cash-conversion before concluding anything.
Example: Northwind Tools has $78M of net income, $164M of operating cash flow and $1,480M of assets, giving an accruals ratio of negative 5.8%, comfortably in the conservative half of its peer group.
Related: accruals, earnings-quality, cash-conversion, operating-cash-flow, restatement