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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 C.R. Bard Inc was -2.19. The lowest was -3.75. And the median was -2.71.
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 * 0.9818||+||0.528 * 0.9965||+||0.404 * 1.0534||+||0.892 * 1.0488||+||0.115 * 0.9334|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0409||+||4.679 * -0.0482||-||0.327 * 1.0742|
|This Year (Jun16) TTM:||Last Year (Jun15) TTM:|
|Accounts Receivable was $467 Mil.|
Revenue was 931.5 + 873.5 + 870.8 + 865.7 = $3,542 Mil.
Gross Profit was 580.5 + 553.1 + 550.8 + 529.4 = $2,214 Mil.
Total Current Assets was $2,185 Mil.
Total Assets was $5,258 Mil.
Property, Plant and Equipment(Net PPE) was $472 Mil.
Depreciation, Depletion and Amortization(DDA) was $207 Mil.
Selling, General & Admin. Expense(SGA) was $1,076 Mil.
Total Current Liabilities was $926 Mil.
Long-Term Debt was $1,641 Mil.
Net Income was 159.2 + 116.2 + 136.3 + -86 = $326 Mil.
Non Operating Income was -9.6 + -60.3 + 461 + -258.6 = $133 Mil.
Cash Flow from Operations was 88.9 + 67.2 + 116.8 + 173.9 = $447 Mil.
|Accounts Receivable was $454 Mil.
Revenue was 859.8 + 819.7 + 867.2 + 830 = $3,377 Mil.
Gross Profit was 526.1 + 508.5 + 547.7 + 521.1 = $2,103 Mil.
Total Current Assets was $2,173 Mil.
Total Assets was $4,968 Mil.
Property, Plant and Equipment(Net PPE) was $461 Mil.
Depreciation, Depletion and Amortization(DDA) was $183 Mil.
Selling, General & Admin. Expense(SGA) was $985 Mil.
Total Current Liabilities was $1,110 Mil.
Long-Term Debt was $1,148 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)|
|=||(467.2 / 3541.5)||/||(453.7 / 3376.7)|
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)|
|=||(2103.4 / 3376.7)||/||(2213.8 / 3541.5)|
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 - (2185.2 + 471.6) / 5258.2)||/||(1 - (2173.1 + 461.3) / 4967.5)|
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))|
|=||(183.2 / (183.2 + 461.3))||/||(206.5 / (206.5 + 471.6))|
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)|
|=||(1075.5 / 3541.5)||/||(985.2 / 3376.7)|
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)|
|=||((1640.5 + 926.4) / 5258.2)||/||((1147.5 + 1110) / 4967.5)|
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|
|=||(325.7 - 132.5||-||446.8)||/||5258.2|
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 -2.70 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
C.R. Bard Inc Annual Data
C.R. Bard Inc Quarterly Data