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Assa Abloy AB (OTCPK:ASAZY)
Beneish M-Score
-2.27 (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 -2.42 suggests that the company is not a manipulator.

ASAZY' s 10-Year Beneish M-Score Range
Min: -3.15   Max: -2.27
Current: -2.27

-3.15
-2.27

During the past 13 years, the highest Beneish M-Score of Assa Abloy AB was -2.27. The lowest was -3.15. And the median was -2.45.


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 * 0.9709+0.528 * 0.9839+0.404 * 0.996+0.892 * 1.0954+0.115 * 0.949
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9767+4.679 * 0-0.327 * 0.9467
=-2.42

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $1,389 Mil.
Revenue was 2077.23262856 + 2065.43995961 + 2088.57446268 + 1919.35735455 = $8,151 Mil.
Gross Profit was 796.314016437 + 797.873832431 + 802.883680582 + 747.30931212 = $3,144 Mil.
Total Current Assets was $2,849 Mil.
Total Assets was $10,486 Mil.
Property, Plant and Equipment(Net PPE) was $1,011 Mil.
Depreciation, Depletion and Amortization(DDA) was $167 Mil.
Selling, General & Admin. Expense(SGA) was $1,650 Mil.
Total Current Liabilities was $2,541 Mil.
Long-Term Debt was $2,014 Mil.
Net Income was 247.479977454 + 245.294662141 + 229.438071165 + 197.161129309 = $919 Mil.
Non Operating Income was 0 + 0.140248520378 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 415.525174009 + 293.399904631 + 252.322050883 + -42.1151146467 = $919 Mil.
Accounts Receivable was $1,306 Mil.
Revenue was 2026.94015001 + 1869.18335901 + 1858.61807137 + 1686.00682594 = $7,441 Mil.
Gross Profit was 675.952854737 + 745.608628659 + 726.803340926 + 676.078188024 = $2,824 Mil.
Total Current Assets was $2,702 Mil.
Total Assets was $10,066 Mil.
Property, Plant and Equipment(Net PPE) was $978 Mil.
Depreciation, Depletion and Amortization(DDA) was $152 Mil.
Selling, General & Admin. Expense(SGA) was $1,543 Mil.
Total Current Liabilities was $2,578 Mil.
Long-Term Debt was $2,040 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)
=(1388.79786077 / 8150.60440539) / (1305.8319302 / 7440.74840633)
=0.17039201 / 0.17549739
=0.9709

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)
=(797.873832431 / 7440.74840633) / (796.314016437 / 8150.60440539)
=0.37959125 / 0.38578499
=0.9839

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 - (2849.42783363 + 1010.89278926) / 10486.1775616) / (1 - (2702.28072861 + 978.111128119) / 10066.2788918)
=0.6318658 / 0.63438408
=0.996

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
=8150.60440539 / 7440.74840633
=1.0954

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))
=(152.457123872 / (152.457123872 + 978.111128119)) / (167.446432319 / (167.446432319 + 1010.89278926))
=0.13485 / 0.14210376
=0.949

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)
=(1650.29194901 / 8150.60440539) / (1542.53447252 / 7440.74840633)
=0.20247479 / 0.20730905
=0.9767

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)
=((2013.65858774 + 2540.7332643) / 10486.1775616) / ((2040.25715598 + 2577.98867289) / 10066.2788918)
=0.43432336 / 0.45878381
=0.9467

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
=(919.373840069 - 0.140248520378 - 919.132014877) / 10486.1775616
=0

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 -2.42 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.07420.94891.01271.10250.89551.09040.97831.08551.0592
GMI 0.99381.12930.87461.10310.98881.12560.90551.04160.9841
AQI 0.99821.0310.97231.00781.04331.02871.03281.01180.996
SGI 0.91731.3021.13810.83911.12681.13431.15981.04971.0041
DEPI 1.11090.89791.02651.08470.867400.97821.15831.0264
SGAI 0.99410.96260.9810.98750.99180.85361.00741.00910.9639
LVGI 0.97321.06870.90431.03490.9050.8670.99480.98280.9467
TATA -0.0078-0.01440.0099-0.0429-0.0766-0.0272-0.0138-0.0221-0.003
M-score -2.50-2.27-2.34-2.67-2.79-2.37-2.46-2.41-2.42

Assa Abloy AB Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 1.03581.04820.99021.05851.06271.02731.02510.9709
GMI 0.90450.90820.91611.04161.05021.05391.06160.9839
AQI 1.02021.01311.01891.01531.00811.00880.99540.996
SGI 1.05651.07531.0741.07651.09821.10531.11421.0954
DEPI 1.22581.44981.56661.13241.11971.09371.06570.949
SGAI 1.01391.00590.99620.87890.87010.87290.8690.9767
LVGI 0.99981.01760.98030.82891.02091.00771.01770.9467
TATA -0.0133-0.0148-0.0164-0.022-0.0123-0.0147-0.00910
M-score -2.48-2.44-2.46-2.34-2.33-2.37-2.34-2.42
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