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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.
During the past 13 years, the highest Beneish M-Score of Assa Abloy AB was -2.21. The lowest was -3.15. And the median was -2.40.
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 * 1.0575||+||0.528 * 0.9642||+||0.404 * 1.0152||+||0.892 * 0.9897||+||0.115 * 0.8979|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9906||+||4.679 * -0.0077||-||0.327 * 0.9483|
* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.
|This Year (Sep15) TTM:||Last Year (Sep14) TTM:|
|Accounts Receivable was $1,459 Mil.|
Revenue was 2087.64149703 + 2066.71264201 + 1784.94522985 + 2077.23262856 = $8,017 Mil.
Gross Profit was 807.803105464 + 801.301828125 + 698.553506226 + 796.314016437 = $3,104 Mil.
Total Current Assets was $2,982 Mil.
Total Assets was $10,459 Mil.
Property, Plant and Equipment(Net PPE) was $899 Mil.
Depreciation, Depletion and Amortization(DDA) was $168 Mil.
Selling, General & Admin. Expense(SGA) was $1,620 Mil.
Total Current Liabilities was $2,463 Mil.
Long-Term Debt was $2,086 Mil.
Net Income was 247.313498847 + 228.424860562 + 189.120868833 + 247.479977454 = $912 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 342.222594102 + 228.182885074 + 7.37290515869 + 415.525174009 = $993 Mil.
|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.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(1458.77909131 / 8016.53199744)||/||(1393.93004404 / 8100.31192684)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(801.301828125 / 8100.31192684)||/||(807.803105464 / 8016.53199744)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (2981.74733143 + 898.528550425) / 10459.3648024)||/||(1 - (2955.03632437 + 994.502258001) / 10382.5979636)|
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.
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))|
|=||(163.372989014 / (163.372989014 + 994.502258001))||/||(167.522130908 / (167.522130908 + 898.528550425))|
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)|
|=||(1620.43992952 / 8016.53199744)||/||(1652.95982134 / 8100.31192684)|
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)|
|=||((2086.20710264 + 2462.73562916) / 10459.3648024)||/||((2001.62688284 + 2760.23112956) / 10382.5979636)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(912.339205695 - 0||-||993.303558344)||/||10459.3648024|
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 -2.48 suggests that the company will not be a manipulator.
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
Assa Abloy AB Annual Data
Assa Abloy AB Quarterly Data