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Assa Abloy AB (OTCPK:ASAZY)
Beneish M-Score
-2.24 (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 -2.34 suggests that the company is not a manipulator.

ASAZY' s 10-Year Beneish M-Score Range
Min: -3.15   Max: -2.16
Current: -2.24

-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 * 1.0251+0.528 * 1.0616+0.404 * 0.9954+0.892 * 1.1142+0.115 * 1.0657
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.869+4.679 * -0.0091-0.327 * 1.0177
=-2.34

* 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 $1,394 Mil.
Revenue was 2065.43995961 + 2088.57446268 + 1919.35735455 + 2026.94015001 = $8,100 Mil.
Gross Profit was 797.873832431 + 802.883680582 + 747.30931212 + 675.952854737 = $3,024 Mil.
Total Current Assets was $2,955 Mil.
Total Assets was $10,383 Mil.
Property, Plant and Equipment(Net PPE) was $995 Mil.
Depreciation, Depletion and Amortization(DDA) was $163 Mil.
Selling, General & Admin. Expense(SGA) was $1,653 Mil.
Total Current Liabilities was $2,760 Mil.
Long-Term Debt was $2,002 Mil.
Net Income was 245.294662141 + 229.438071165 + 197.161129309 + 120.618398898 = $793 Mil.
Non Operating Income was 0.140248520378 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 293.399904631 + 252.322050883 + -42.1151146467 + 382.82565437 = $886 Mil.
Accounts Receivable was $1,220 Mil.
Revenue was 1869.18335901 + 1858.61807137 + 1686.00682594 + 1856.08128602 = $7,270 Mil.
Gross Profit was 745.608628659 + 726.803340926 + 676.078188024 + 732.787382469 = $2,881 Mil.
Total Current Assets was $2,648 Mil.
Total Assets was $9,289 Mil.
Property, Plant and Equipment(Net PPE) was $859 Mil.
Depreciation, Depletion and Amortization(DDA) was $152 Mil.
Selling, General & Admin. Expense(SGA) was $1,707 Mil.
Total Current Liabilities was $2,484 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)
=(1393.93004404 / 8100.31192684) / (1220.33898305 / 7269.88954234)
=0.1720835 / 0.16786211
=1.0251

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)
=(802.883680582 / 7269.88954234) / (797.873832431 / 8100.31192684)
=0.39633031 / 0.37332139
=1.0616

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 - (2955.03632437 + 994.502258001) / 10382.5979636) / (1 - (2648.22804314 + 858.705701079) / 9289.36825886)
=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
=8100.31192684 / 7269.88954234
=1.1142

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))
=(151.968458989 / (151.968458989 + 858.705701079)) / (163.372989014 / (163.372989014 + 994.502258001))
=0.15036346 / 0.14109723
=1.0657

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)
=(1652.95982134 / 8100.31192684) / (1707.0788094 / 7269.88954234)
=0.20406126 / 0.23481496
=0.869

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)
=((2001.62688284 + 2760.23112956) / 10382.5979636) / ((1701.84899846 + 2484.4375963) / 9289.36825886)
=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
=(792.512261513 - 0.140248520378 - 886.432495238) / 10382.5979636
=-0.0091

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 -2.34 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 1.00751.07420.94891.01271.10250.89550.86271.09040.97831.0855
GMI 0.97380.99381.12930.87461.10310.98880.93591.12560.90551.0416
AQI 0.99940.99821.0310.97231.00781.04331.06981.02871.03281.0118
SGI 1.16180.91731.3021.13810.83911.12681.09721.13431.15981.0497
DEPI 1.73571.11090.89791.02651.08470.86740.99631.01740.97821.1583
SGAI 1.03020.99410.96260.9810.98750.99181.07710.85361.00741.0091
LVGI 0.91650.97321.06870.90431.03490.9051.23560.8670.99480.9828
TATA -0.0111-0.0078-0.01440.0099-0.0429-0.0766-0.0279-0.0272-0.0138-0.0221
M-score -2.29-2.50-2.27-2.34-2.67-2.79-2.75-2.26-2.46-2.41

Assa Abloy AB Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.85540.90441.04641.03581.04820.99021.05851.06271.02731.0251
GMI 1.11921.10860.90930.90450.90820.91611.04161.05021.05391.0616
AQI 1.16981.03021.02921.02021.01311.01891.01531.00811.00880.9954
SGI 1.19621.19791.08441.05651.07531.0741.07651.09821.10531.1142
DEPI 0.63190.59510.9981.22581.44981.56661.13241.11971.09371.0657
SGAI 0.98180.9871.00541.01391.00590.99620.87890.87010.87290.869
LVGI 0.70910.79180.96880.99981.01760.98030.82891.02091.00771.0177
TATA -0.0179-0.0303-0.0146-0.0133-0.0148-0.0164-0.022-0.0123-0.0147-0.0091
M-score -2.33-2.44-2.46-2.48-2.44-2.46-2.34-2.33-2.37-2.34
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