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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 BlackRock Inc was -1.29. The lowest was -4.71. And the median was -2.50.
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 BlackRock 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 * 0.8668||+||0.528 * 0.9981||+||0.404 * 0.9974||+||0.892 * 1.0885||+||0.115 * 0.9557|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9623||+||4.679 * 0.0004||-||0.327 * 1.0153|
* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.
|This Year (Dec14) TTM:||Last Year (Dec13) TTM:|
|Accounts Receivable was $2,120 Mil.|
Revenue was 2784 + 2849 + 2778 + 2670 = $11,081 Mil.
Gross Profit was 2688 + 2759 + 2689 + 2581 = $10,717 Mil.
Total Current Assets was $8,121 Mil.
Total Assets was $239,808 Mil.
Property, Plant and Equipment(Net PPE) was $467 Mil.
Depreciation, Depletion and Amortization(DDA) was $278 Mil.
Selling, General & Admin. Expense(SGA) was $6,030 Mil.
Total Current Liabilities was $2,900 Mil.
Long-Term Debt was $8,327 Mil.
Net Income was 813 + 917 + 808 + 756 = $3,294 Mil.
Non Operating Income was -8 + -1 + 73 + 60 = $124 Mil.
Cash Flow from Operations was 1271 + 1284 + 732 + -206 = $3,081 Mil.
|Accounts Receivable was $2,247 Mil.
Revenue was 2777 + 2472 + 2482 + 2449 = $10,180 Mil.
Gross Profit was 2690 + 2387 + 2392 + 2358 = $9,827 Mil.
Total Current Assets was $6,798 Mil.
Total Assets was $219,873 Mil.
Property, Plant and Equipment(Net PPE) was $525 Mil.
Depreciation, Depletion and Amortization(DDA) was $291 Mil.
Selling, General & Admin. Expense(SGA) was $5,757 Mil.
Total Current Liabilities was $2,831 Mil.
Long-Term Debt was $7,308 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)|
|=||(2120 / 11081)||/||(2247 / 10180)|
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)|
|=||(2759 / 10180)||/||(2688 / 11081)|
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 - (8121 + 467) / 239808)||/||(1 - (6798 + 525) / 219873)|
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))|
|=||(291 / (291 + 525))||/||(278 / (278 + 467))|
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)|
|=||(6030 / 11081)||/||(5757 / 10180)|
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)|
|=||((8327 + 2900) / 239808)||/||((7308 + 2831) / 219873)|
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|
|=||(3294 - 124||-||3081)||/||239808|
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.
BlackRock Inc has a M-score of -2.53 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
BlackRock Inc Annual Data
BlackRock Inc Quarterly Data