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Assa Abloy AB (OTCPK:ASAZY)
Beneish M-Score
-2.35 (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 -2.39 suggests that the company is not a manipulator.

ASAZY' s 10-Year Beneish M-Score Range
Min: -3.15   Max: -2.31
Current: -2.35

-3.15
-2.31

During the past 13 years, the highest Beneish M-Score of Assa Abloy AB was -2.31. The lowest was -3.15. And the median was -2.49.


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 * 1.0178+0.528 * 1.0542+0.404 * 1.0088+0.892 * 1.0991+0.115 * 1.0851
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8714+4.679 * -0.0157-0.327 * 1.0077
=-2.39

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $1,374 Mil.
Revenue was 2047.80759642 + 1878.91281112 + 2041.62812211 + 1893.10237203 = $7,861 Mil.
Gross Profit was 787.212201203 + 731.562070545 + 680.85106383 + 755.149812734 = $2,955 Mil.
Total Current Assets was $2,898 Mil.
Total Assets was $10,370 Mil.
Property, Plant and Equipment(Net PPE) was $989 Mil.
Depreciation, Depletion and Amortization(DDA) was $160 Mil.
Selling, General & Admin. Expense(SGA) was $1,617 Mil.
Total Current Liabilities was $2,846 Mil.
Long-Term Debt was $2,084 Mil.
Net Income was 224.959671506 + 193.006565888 + 121.492445267 + 230.024968789 = $769 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 247.396979029 + -41.2276683463 + 385.599753315 + 340.823970037 = $933 Mil.
Accounts Receivable was $1,229 Mil.
Revenue was 1849.90931076 + 1675.3507014 + 1888.7345679 + 1738.70481928 = $7,153 Mil.
Gross Profit was 723.397823458 + 671.805148759 + 745.679012346 + 693.222891566 = $2,834 Mil.
Total Current Assets was $2,696 Mil.
Total Assets was $9,333 Mil.
Property, Plant and Equipment(Net PPE) was $853 Mil.
Depreciation, Depletion and Amortization(DDA) was $152 Mil.
Selling, General & Admin. Expense(SGA) was $1,688 Mil.
Total Current Liabilities was $2,700 Mil.
Long-Term Debt was $1,702 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)
=(1374.24842352 / 7861.45090168) / (1228.53688029 / 7152.69939934)
=0.1748085 / 0.17175849
=1.0178

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)
=(731.562070545 / 7152.69939934) / (787.212201203 / 7861.45090168)
=0.39622871 / 0.37585621
=1.0542

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 - (2897.63894999 + 989.441267048) / 10370.1422496) / (1 - (2696.34220073 + 853.23458283) / 9333.28295042)
=0.62516616 / 0.61968615
=1.0088

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
=7861.45090168 / 7152.69939934
=1.0991

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))
=(151.607969556 / (151.607969556 + 853.23458283)) / (159.796310142 / (159.796310142 + 989.441267048))
=0.15087734 / 0.1390455
=1.0851

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)
=(1616.80524642 / 7861.45090168) / (1688.07265492 / 7152.69939934)
=0.20566245 / 0.23600498
=0.8714

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)
=((2083.73661827 + 2845.57853058) / 10370.1422496) / ((1702.23700121 + 2700.42321644) / 9333.28295042)
=0.47533727 / 0.47171614
=1.0077

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
=(769.48365145 - 0 - 932.593034035) / 10370.1422496
=-0.0157

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 -2.39 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 1.00751.07420.94891.01271.10250.89551.09040.97831.0855
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 -2.33-2.45-2.34-2.30-2.69-2.78-2.40-2.44-2.42

Assa Abloy AB Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.84080.89580.9021.05881.02151.02971.00741.05271.05451.0178
GMI 1.13851.11911.10930.90970.90430.90850.91611.04171.05041.0542
AQI 1.17211.16981.03021.02921.02021.01311.01891.01531.00811.0088
SGI 1.24351.17541.19221.08911.06511.07021.07621.07141.09031.0991
DEPI 0001.0071.21511.42861.58831.12721.11241.0851
SGAI 0.96950.98190.98641.00491.01381.00580.99590.87820.8690.8714
LVGI 0.80080.70910.79180.96880.99981.01760.98030.82891.02091.0077
TATA -0.0202-0.0176-0.0304-0.0147-0.0137-0.0153-0.0168-0.0222-0.0134-0.0157
M-score -2.41-2.39-2.52-2.44-2.49-2.46-2.45-2.35-2.35-2.39
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