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Bank of New York Mellon Corp (NYSE:BK)
Beneish M-Score
-2.62 (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.

Bank of New York Mellon Corp has a M-score of -2.62 suggests that the company is not a manipulator.

BK' s Beneish M-Score Range Over the Past 10 Years
Min: -3.93   Max: 6.37
Current: -2.62

-3.93
6.37

During the past 13 years, the highest Beneish M-Score of Bank of New York Mellon Corp was 6.37. The lowest was -3.93. And the median was -2.48.


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 Bank of New York Mellon 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 * 1.0006+0.528 * 1+0.404 * 0.9998+0.892 * 0.9402+0.115 * 0.947
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0419+4.679 * 0.0007-0.327 * 1.2423
=-2.62

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $540 Mil.
Revenue was 3776 + 3730 + 3726 + 3790 = $15,022 Mil.
Gross Profit was 3776 + 3730 + 3726 + 3790 = $15,022 Mil.
Total Current Assets was $0 Mil.
Total Assets was $372,351 Mil.
Property, Plant and Equipment(Net PPE) was $1,399 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,497 Mil.
Selling, General & Admin. Expense(SGA) was $7,057 Mil.
Total Current Liabilities was $0 Mil.
Long-Term Debt was $24,671 Mil.
Net Income was 873 + 817 + 693 + 833 = $3,216 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was -332 + 1794 + 142 + 1351 = $2,955 Mil.
Accounts Receivable was $574 Mil.
Revenue was 3886 + 3792 + 3689 + 4611 = $15,978 Mil.
Gross Profit was 3886 + 3792 + 3689 + 4611 = $15,978 Mil.
Total Current Assets was $0 Mil.
Total Assets was $395,254 Mil.
Property, Plant and Equipment(Net PPE) was $1,412 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,354 Mil.
Selling, General & Admin. Expense(SGA) was $7,204 Mil.
Total Current Liabilities was $0 Mil.
Long-Term Debt was $21,081 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)
=(540 / 15022) / (574 / 15978)
=0.03594728 / 0.0359244
=1.0006

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)
=(15978 / 15978) / (15022 / 15022)
=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 + 1399) / 372351) / (1 - (0 + 1412) / 395254)
=0.99624279 / 0.99642761
=0.9998

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
=15022 / 15978
=0.9402

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))
=(1354 / (1354 + 1412)) / (1497 / (1497 + 1399))
=0.48951555 / 0.51691989
=0.947

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)
=(7057 / 15022) / (7204 / 15978)
=0.46977766 / 0.45086995
=1.0419

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)
=((24671 + 0) / 372351) / ((21081 + 0) / 395254)
=0.06625738 / 0.05333532
=1.2423

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
=(3216 - 0 - 2955) / 372351
=0.0007

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.

Bank of New York Mellon Corp has a M-score of -2.62 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.

Bank of New York Mellon Corp Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.02918.02830.69360.24230.43851.22380.90591.01670.93730.9562
GMI 1111111111
AQI 0.99971.00141.00170.99951.00071.00171.00051.00021.00081.0001
SGI 1.12971.66121.19790.56391.81281.06160.99191.031.04280.9683
DEPI 1.07450.99040.94331.1141.13480.85770.73640.940.94860.9363
SGAI 1.01170.93941.22331.60380.60641.08681.05550.98160.93921.0236
LVGI 1.17971.14450.8160.88690.93890.86740.8160.98820.99681.0259
TATA -0.0026-0.0098-0.0063-0.0229-0.00620.00090.00230.0073-0.005-0.0025
M-score -2.404.49-2.60-3.73-2.20-2.20-2.54-2.40-2.52-2.58

Bank of New York Mellon Corp Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 0.96111.03031.00290.95841.00380.85970.97540.95621.0241.0006
GMI 1111111111
AQI 1.00021.00051.00071.00081.00091.00040.99991.00010.99980.9998
SGI 1.03270.98641.03371.01991.04111.07010.96170.96830.95550.9402
DEPI 0.95261.00840.95130.94860.96490.93010.97240.93630.92540.947
SGAI 1.04831.05580.97910.97060.9240.90431.01221.00411.02471.0419
LVGI 1.02641.00291.09470.99680.89530.98111.00741.02591.13291.2423
TATA 0.00540.00020.0004-0.005-0.007-0.0045-0.0066-0.0025-0.00750.0007
M-score -2.48-2.47-2.48-2.52-2.43-2.55-2.58-2.58-2.59-2.62
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