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Assa Abloy AB (OTCPK:ASAZY)
Beneish M-Score
-2.42 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

Assa Abloy AB has a M-score of -2.40 suggests that the company is not a manipulator.

ASAZY' s 10-Year Beneish M-Score Range
Min: -2.52   Max: -2.24
Current: -2.42

-2.52
-2.24

During the past 13 years, the highest Beneish M-Score of Assa Abloy AB was -2.24. The lowest was -2.52. And the median was -2.47.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of Assa Abloy AB for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 1+0.528 * 1.0417+0.404 * 1.0153+0.892 * 1.0714+0.115 * 1.1272
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8782+4.679 * -0.0222-0.327 * 0.8289
=-2.40

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $0 Mil.
Revenue was 2041.62812211 + 1893.10237203 + 1849.90931076 + 1675.3507014 = $7,460 Mil.
Gross Profit was 680.85106383 + 755.149812734 + 723.397823458 + 671.805148759 = $2,831 Mil.
Total Current Assets was $2,722 Mil.
Total Assets was $10,139 Mil.
Property, Plant and Equipment(Net PPE) was $985 Mil.
Depreciation, Depletion and Amortization(DDA) was $153 Mil.
Selling, General & Admin. Expense(SGA) was $1,545 Mil.
Total Current Liabilities was $2,597 Mil.
Long-Term Debt was $2,055 Mil.
Net Income was 121.492445267 + 230.024968789 + 207.376058041 + 175.427778634 = $734 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 385.599753315 + 340.823970037 + 205.411124547 + 27.7478032989 = $960 Mil.
Accounts Receivable was $0 Mil.
Revenue was 1888.7345679 + 1738.70481928 + 1726.18705036 + 1609.1152019 = $6,963 Mil.
Gross Profit was 745.679012346 + 693.222891566 + 674.388489209 + 639.40023753 = $2,753 Mil.
Total Current Assets was $2,601 Mil.
Total Assets was $9,237 Mil.
Property, Plant and Equipment(Net PPE) was $865 Mil.
Depreciation, Depletion and Amortization(DDA) was $154 Mil.
Selling, General & Admin. Expense(SGA) was $1,642 Mil.
Total Current Liabilities was $2,610 Mil.
Long-Term Debt was $2,503 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(0 / 7459.99050631) / (0 / 6962.74163944)
=0 / 0
=1

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(755.149812734 / 6962.74163944) / (680.85106383 / 7459.99050631)
=0.3953458 / 0.37951843
=1.0417

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (2721.86247302 + 985.198889917) / 10139.2229417) / (1 - (2600.77160494 + 864.660493827) / 9237.03703704)
=0.63438408 / 0.62483293
=1.0153

4. SGI = Sales Growth Index

Ratio of sales in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=7459.99050631 / 6962.74163944
=1.0714

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI=(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) / (Depreciation_t / (Depreciaton_t + PPE_t))
=(154.188929161 / (154.188929161 + 864.660493827)) / (152.784787313 / (152.784787313 + 985.198889917))
=0.15133633 / 0.13425921
=1.1272

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI=(SGA_t / Sales_t) / (SGA_t-1 /Sales_t-1)
=(1545.19572138 / 7459.99050631) / (1642.14621679 / 6962.74163944)
=0.20713106 / 0.23584764
=0.8782

7. LVGI = Leverage Index

The ratio of total debt to total assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((2055.04162812 + 2596.66975023) / 10139.2229417) / ((2503.08641975 + 2609.72222222) / 9237.03703704)
=0.45878381 / 0.55351176
=0.8289

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(734.321250731 - 0 - 959.582651198) / 10139.2229417
=-0.0222

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

Assa Abloy AB has a M-score of -2.40 suggests that the company will not be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Assa Abloy AB Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 111111111
GMI 0.97380.99381.12930.87461.10310.98881.12560.90551.0416
AQI 0.99940.99821.0310.97231.00781.04331.02871.03281.0118
SGI 1.11140.97971.22891.17720.81961.13731.10511.17871.039
DEPI 1.73571.11090.89791.02651.08470.867400.97821.1583
SGAI 1.03020.99410.96260.9810.98750.99180.85361.00741.0091
LVGI 0.91650.97321.06870.90431.03490.9050.8670.99480.9828
TATA -0.0111-0.0078-0.01440.0099-0.0429-0.0766-0.0272-0.0138-0.0221
M-score -2.34-2.52-2.29-2.32-2.78-2.69-2.48-2.42-2.50

Assa Abloy AB Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 111111111
GMI 1.12991.13851.11911.10930.90970.90430.90850.91611.0417
AQI 1.02861.17211.16981.03021.02921.02021.01311.01891.0153
SGI 1.26291.24351.17541.19221.08911.06511.07021.07621.0714
DEPI 00001.0071.21511.42861.58831.1272
SGAI 0.97950.96950.98190.98641.00491.01381.00580.99590.8782
LVGI 1.05560.80080.70910.79180.96880.99981.01760.98030.8289
TATA -0.0259-0.0202-0.0176-0.0304-0.0147-0.0137-0.0153-0.0168-0.0222
M-score -2.42-2.26-2.29-2.43-2.50-2.51-2.49-2.45-2.40
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