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GuruFocus has detected 3 Warning Signs with BB&T Corp $BBT.
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BB&T Corp (NYSE:BBT)
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.

BB&T Corp has a M-score of -2.35 suggests that the company is not a manipulator.

BBT' s Beneish M-Score Range Over the Past 10 Years
Min: -3.29   Max: -1.12
Current: -2.35

-3.29
-1.12

During the past 13 years, the highest Beneish M-Score of BB&T Corp was -1.12. The lowest was -3.29. And the median was -2.43.


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 BB&T Corp 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+0.528 * 1+0.404 * 1+0.892 * 1.123+0.115 * 0.8959
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0152+4.679 * -0.0011-0.327 * 0.8848
=-2.35

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $0 Mil.
Revenue was 2727 + 2774 + 2747 + 2545 = $10,793 Mil.
Gross Profit was 2727 + 2774 + 2747 + 2545 = $10,793 Mil.
Total Current Assets was $0 Mil.
Total Assets was $219,276 Mil.
Property, Plant and Equipment(Net PPE) was $2,107 Mil.
Depreciation, Depletion and Amortization(DDA) was $555 Mil.
Selling, General & Admin. Expense(SGA) was $4,614 Mil.
Total Current Liabilities was $0 Mil.
Long-Term Debt was $21,965 Mil.
Net Income was 636 + 642 + 584 + 564 = $2,426 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 2372 + -561 + 991 + -130 = $2,672 Mil.
Accounts Receivable was $0 Mil.
Revenue was 2519 + 2452 + 2331 + 2309 = $9,611 Mil.
Gross Profit was 2519 + 2452 + 2331 + 2309 = $9,611 Mil.
Total Current Assets was $0 Mil.
Total Assets was $209,947 Mil.
Property, Plant and Equipment(Net PPE) was $2,007 Mil.
Depreciation, Depletion and Amortization(DDA) was $461 Mil.
Selling, General & Admin. Expense(SGA) was $4,047 Mil.
Total Current Liabilities was $0 Mil.
Long-Term Debt was $23,769 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)
=(0 / 10793) / (0 / 9611)
=0 / 0
=1

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)
=(9611 / 9611) / (10793 / 10793)
=1 / 1
=1

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 - (0 + 2107) / 219276) / (1 - (0 + 2007) / 209947)
=0.99039111 / 0.99044044
=1

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
=10793 / 9611
=1.123

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))
=(461 / (461 + 2007)) / (555 / (555 + 2107))
=0.18679092 / 0.20848986
=0.8959

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)
=(4614 / 10793) / (4047 / 9611)
=0.42749931 / 0.42108001
=1.0152

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)
=((21965 + 0) / 219276) / ((23769 + 0) / 209947)
=0.10017056 / 0.11321429
=0.8848

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
=(2426 - 0 - 2672) / 219276
=-0.0011

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.

BB&T Corp has a M-score of -2.35 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 local exchange's currency.

BB&T Corp Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI
GMI
AQI
SGI
DEPI
SGAI
LVGI
TATA
M-score

BB&T Corp Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 0111111111
GMI 1111111111
AQI 1.00051.00041.00010.99991.00011.00021.00051.00051.00051
SGI 0.96050.95630.9750.99491.01391.04131.06281.10411.12021.123
DEPI 0.96810.9761.00520.99391.04211.00840.95550.94280.87320.8959
SGAI 0.99951.04631.03831.01671.01551.01881.00791.01531.01921.0152
LVGI 1.06071.06240.9781.04460.99690.90740.86750.9040.85850.8848
TATA -0.0157-0.00580.0007-0.0011-0.0071-0.004-0.0059-0.00690.0046-0.0011
M-score -3.53-2.58-2.50-2.51-2.50-2.43-2.41-2.40-2.32-2.35
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