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GuruFocus has detected 5 Warning Signs with C.R. Bard Inc $BCR.
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C.R. Bard Inc (NYSE:BCR)
Beneish M-Score
-2.40 (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.

C.R. Bard Inc has a M-score of -2.27 suggests that the company is not a manipulator.

BCR' s Beneish M-Score Range Over the Past 10 Years
Min: -3.75   Max: -2.18
Current: -2.4

-3.75
-2.18

During the past 13 years, the highest Beneish M-Score of C.R. Bard Inc was -2.18. The lowest was -3.75. And the median was -2.65.


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 C.R. Bard Inc 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 * 0.9863+0.528 * 0.9816+0.404 * 0.9501+0.892 * 1.0872+0.115 * 0.9557
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0014+4.679 * 0.0406-0.327 * 1.0442
=-2.27

* 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 $477 Mil.
Revenue was 967.1 + 941.9 + 931.5 + 873.5 = $3,714 Mil.
Gross Profit was 619 + 589.7 + 580.5 + 553.1 = $2,342 Mil.
Total Current Assets was $2,316 Mil.
Total Assets was $5,306 Mil.
Property, Plant and Equipment(Net PPE) was $490 Mil.
Depreciation, Depletion and Amortization(DDA) was $213 Mil.
Selling, General & Admin. Expense(SGA) was $1,102 Mil.
Total Current Liabilities was $1,109 Mil.
Long-Term Debt was $1,642 Mil.
Net Income was 159.6 + 96.4 + 159.2 + 116.2 = $531 Mil.
Non Operating Income was -44.5 + -116.2 + -9.6 + -60.3 = $-231 Mil.
Cash Flow from Operations was 202.4 + 188.1 + 88.9 + 67.2 = $547 Mil.
Accounts Receivable was $445 Mil.
Revenue was 870.8 + 865.7 + 859.8 + 819.7 = $3,416 Mil.
Gross Profit was 550.8 + 529.4 + 526.1 + 508.5 = $2,115 Mil.
Total Current Assets was $1,969 Mil.
Total Assets was $4,844 Mil.
Property, Plant and Equipment(Net PPE) was $472 Mil.
Depreciation, Depletion and Amortization(DDA) was $193 Mil.
Selling, General & Admin. Expense(SGA) was $1,012 Mil.
Total Current Liabilities was $1,261 Mil.
Long-Term Debt was $1,144 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)
=(477.3 / 3714) / (445.1 / 3416)
=0.12851373 / 0.13029859
=0.9863

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)
=(2114.8 / 3416) / (2342.3 / 3714)
=0.61908665 / 0.63066774
=0.9816

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 - (2316.4 + 489.5) / 5306.1) / (1 - (1969.3 + 472.4) / 4844)
=0.47119353 / 0.49593311
=0.9501

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
=3714 / 3416
=1.0872

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))
=(193.1 / (193.1 + 472.4)) / (213.4 / (213.4 + 489.5))
=0.29015778 / 0.30359937
=0.9557

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)
=(1101.9 / 3714) / (1012.1 / 3416)
=0.29668821 / 0.2962822
=1.0014

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)
=((1641.7 + 1108.9) / 5306.1) / ((1144.1 + 1260.7) / 4844)
=0.5183845 / 0.49644922
=1.0442

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
=(531.4 - -230.6 - 546.6) / 5306.1
=0.0406

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.

C.R. Bard Inc has a M-score of -2.27 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.

C.R. Bard Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.97410.97761.08520.97130.99640.96310.96740.87080.95140.9863
GMI 1.0080.99110.98580.99461.00621.00251.01850.97911.00360.9816
AQI 1.02141.02181.01441.11341.15830.9761.08381.00520.97170.9501
SGI 1.11231.11361.03381.07311.06481.02131.03091.08991.02781.0872
DEPI 0.91060.87770.97750.90430.99080.88951.00990.97060.9670.9557
SGAI 0.94230.98810.93051.03740.98221.00711.09230.97851.00331.0014
LVGI 0.90230.91010.93572.74991.13670.96420.88341.0021.25381.0442
TATA -0.0743-0.0419-0.043-0.0316-0.0991-0.0219-0.0947-0.0143-0.04390.0407
M-score -2.71-2.57-2.54-3.14-2.86-2.61-2.86-2.59-2.80-2.27

C.R. Bard Inc Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 0.87080.89650.93990.94870.95141.01140.98180.97290.9863
GMI 0.97910.98090.98220.99411.00361.00120.99650.98450.9816
AQI 1.00520.97470.89740.93040.97170.99991.05340.98780.9501
SGI 1.08991.07581.06331.05071.02781.03761.04881.06021.0872
DEPI 0.97060.99120.98480.97330.9670.950.93340.94160.9557
SGAI 0.97850.96880.96560.9641.00331.02921.04091.04871.0014
LVGI 1.0021.02141.0641.22911.25381.20911.07420.96271.0442
TATA -0.0143-0.0116-0.0673-0.0457-0.0439-0.02820.04570.05010.0406
M-score -2.59-2.58-2.86-2.80-2.80-2.65-2.26-2.23-2.27
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