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Assa Abloy AB (OTCPK:ASAZY)
Beneish M-Score
-2.16 (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 -2.30 suggests that the company is not a manipulator.

ASAZY' s 10-Year Beneish M-Score Range
Min: -3.15   Max: -2.16
Current: -2.16

-3.15
-2.16

During the past 13 years, the highest Beneish M-Score of Assa Abloy AB was -2.16. The lowest was -3.15. And the median was -2.55.


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 * 1.0136+0.528 * 1.0624+0.404 * 0.9954+0.892 * 1.095+0.115 * 1.7015
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8671+4.679 * -0.0098-0.327 * 1.0177
=-2.30

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $1,372 Mil.
Revenue was 2032.5438887 + 2047.83762777 + 1878.91281112 + 2041.62812211 = $8,001 Mil.
Gross Profit was 785.166169813 + 787.223745765 + 731.562070545 + 680.85106383 = $2,985 Mil.
Total Current Assets was $2,908 Mil.
Total Assets was $10,217 Mil.
Property, Plant and Equipment(Net PPE) was $979 Mil.
Depreciation, Depletion and Amortization(DDA) was $161 Mil.
Selling, General & Admin. Expense(SGA) was $1,629 Mil.
Total Current Liabilities was $2,716 Mil.
Long-Term Debt was $1,970 Mil.
Net Income was 241.38787678 + 224.962970567 + 193.006565888 + 121.492445267 = $781 Mil.
Non Operating Income was 0.138014795186 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 288.726951529 + 247.400607136 + -41.2276683463 + 385.599753315 = $880 Mil.
Accounts Receivable was $1,236 Mil.
Revenue was 1893.10237203 + 1849.90931076 + 1675.3507014 + 1888.7345679 = $7,307 Mil.
Gross Profit was 755.149812734 + 723.397823458 + 671.805148759 + 745.679012346 = $2,896 Mil.
Total Current Assets was $2,682 Mil.
Total Assets was $9,408 Mil.
Property, Plant and Equipment(Net PPE) was $870 Mil.
Depreciation, Depletion and Amortization(DDA) was $276 Mil.
Selling, General & Admin. Expense(SGA) was $1,715 Mil.
Total Current Liabilities was $2,516 Mil.
Long-Term Debt was $1,724 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)
=(1371.72904935 / 8000.9224497) / (1235.95505618 / 7307.0969521)
=0.17144636 / 0.16914447
=1.0136

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)
=(787.223745765 / 7307.0969521) / (785.166169813 / 8000.9224497)
=0.39633138 / 0.37305737
=1.0624

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 - (2907.97173457 + 978.662912664) / 10217.2352876) / (1 - (2682.11610487 + 869.694132335) / 9408.23970037)
=0.61960016 / 0.62247877
=0.9954

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
=8000.9224497 / 7307.0969521
=1.095

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))
=(275.6582698 / (275.6582698 + 869.694132335)) / (161.239565363 / (161.239565363 + 978.662912664))
=0.24067551 / 0.14145032
=1.7015

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)
=(1628.62378262 / 8000.9224497) / (1715.34767259 / 7307.0969521)
=0.2035545 / 0.23475091
=0.8671

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)
=((1969.7471569 + 2716.26918406) / 10217.2352876) / ((1723.6267166 + 2516.22971286) / 9408.23970037)
=0.45863839 / 0.45065353
=1.0177

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
=(780.849858502 - 0.138014795186 - 880.499643634) / 10217.2352876
=-0.0098

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 -2.30 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 0.94681.14310.94891.01271.09970.89780.95230.97831.0855
GMI 0.9671.00081.12930.87461.07291.01670.93590.90551.0416
AQI 0.98231.01551.0310.97231.00781.04331.06981.02921.0153
SGI 1.11140.97971.22891.17720.82171.13441.131.17871.039
DEPI 0.97081.98640.89791.02651.08470.86740.996301.1583
SGAI 1.03020.99410.96260.9811.0370.94450.94390.87581.0091
LVGI 0.90010.98471.06870.90431.03490.9050.92320.82180.9771
TATA -0.0632-0.0078-0.0240.0099-0.0248-0.0766-0.0363-0.0147-0.0221
M-score -2.73-2.28-2.38-2.30-2.63-2.76-2.55-2.48-2.42

Assa Abloy AB Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 1.02470.98960.9981.00741.05271.05451.01781.0136
GMI 0.91770.9120.91610.91621.04181.05041.05421.0624
AQI 1.02921.02421.01681.02261.01531.00811.00880.9954
SGI 1.12531.09941.10421.07621.07141.09031.09911.095
DEPI 00001.16041.38561.56241.7015
SGAI 0.9981.00710.99910.99590.87820.8690.87140.8671
LVGI 0.96880.79290.7960.7730.82891.02091.00771.0177
TATA -0.0151-0.0141-0.0155-0.0168-0.0222-0.0134-0.0157-0.0098
M-score -2.55-2.55-2.55-2.56-2.35-2.32-2.33-2.30
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