Ubiquiti's Earnings Raise Concerns with High Accrual Ratio

Ubiquiti Inc.'s (NYSE:UI) earnings may be understated due to a high accrual ratio of 0.30, indicating that its free cash flow was significantly lower than its reported profit of $791.8m. The company's free cash flow actually declined over the last year, but there is reason to believe it may bounce back next year. Shareholders should look for improved cash flow relative to profit in the current year.