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Bank of New York Mellon Corp (NYSE:BK)
Beneish M-Score
-2.58 (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 -2.58 suggests that the company is not a manipulator.

BK' s Beneish M-Score Range Over the Past 10 Years
Min: -3.74   Max: 4.49
Current: -2.58

-3.74
4.49

During the past 13 years, the highest Beneish M-Score of Bank of New York Mellon Corp was 4.49. The lowest was -3.74. And the median was -2.47.


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 * 0.9525+0.528 * 1+0.404 * 1.0001+0.892 * 0.972+0.115 * 0.9363
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0088+4.679 * -0.0025-0.327 * 1.0259
=-2.58

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $562 Mil.
Revenue was 3726 + 3790 + 3886 + 3851 = $15,253 Mil.
Gross Profit was 3726 + 3790 + 3886 + 3851 = $15,253 Mil.
Total Current Assets was $0 Mil.
Total Assets was $393,780 Mil.
Property, Plant and Equipment(Net PPE) was $1,379 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,457 Mil.
Selling, General & Admin. Expense(SGA) was $7,176 Mil.
Total Current Liabilities was $0 Mil.
Long-Term Debt was $22,070 Mil.
Net Income was 693 + 833 + 853 + 779 = $3,158 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 142 + 1351 + 2698 + -64 = $4,127 Mil.
Accounts Receivable was $607 Mil.
Revenue was 3689 + 4611 + 3745 + 3647 = $15,692 Mil.
Gross Profit was 3689 + 4611 + 3745 + 3647 = $15,692 Mil.
Total Current Assets was $0 Mil.
Total Assets was $385,303 Mil.
Property, Plant and Equipment(Net PPE) was $1,394 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,292 Mil.
Selling, General & Admin. Expense(SGA) was $7,318 Mil.
Total Current Liabilities was $0 Mil.
Long-Term Debt was $21,050 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)
=(562 / 15253) / (607 / 15692)
=0.03684521 / 0.03868213
=0.9525

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)
=(3790 / 15692) / (3726 / 15253)
=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 + 1379) / 393780) / (1 - (0 + 1394) / 385303)
=0.99649804 / 0.99638207
=1.0001

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
=15253 / 15692
=0.972

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))
=(1292 / (1292 + 1394)) / (1457 / (1457 + 1379))
=0.48101266 / 0.51375176
=0.9363

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)
=(7176 / 15253) / (7318 / 15692)
=0.47046483 / 0.46635228
=1.0088

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)
=((22070 + 0) / 393780) / ((21050 + 0) / 385303)
=0.05604652 / 0.05463233
=1.0259

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
=(3158 - 0 - 4127) / 393780
=-0.0025

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 -2.58 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 1.178.02830.68960.24270.44041.22380.90931.01730.93330.9562
GMI 1111111111
AQI 0.99971.00141.00170.99951.00071.00171.00051.00021.00081.0001
SGI 0.99361.66121.20480.56311.8051.06160.98811.02941.04730.9683
DEPI 1.07450.99040.93711.12151.13480.85770.73640.940.94860.9363
SGAI 1.04240.93941.03042.13290.54131.041.02411.06180.97010.9867
LVGI 1.17971.14450.8160.88690.93890.86740.8160.98820.99681.0259
TATA -0.0026-0.0098-0.0063-0.0229-0.00620.00090.00230.0074-0.005-0.0025
M-score -2.404.49-2.56-3.82-2.19-2.19-2.54-2.42-2.52-2.57

Bank of New York Mellon Corp Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 0.99070.96111.03031.00290.95841.00010.85650.97160.95251.0279
GMI 1111111111
AQI 1.00021.00021.00051.00071.00081.00091.00040.99991.00010.9998
SGI 1.05711.03270.98641.03371.01991.0451.0740.96550.9720.9519
DEPI 0.940.95261.00840.95130.94860.96490.93010.97240.93631.0419
SGAI 1.02381.04831.05580.97910.97060.92830.90861.01691.00880.9974
LVGI 0.98821.02641.00291.09470.99680.89530.98111.00741.02591.1329
TATA 0.00730.00540.00020.0004-0.005-0.007-0.0045-0.0066-0.0025-0.0027
M-score -2.41-2.48-2.47-2.48-2.52-2.43-2.55-2.58-2.58-2.55
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