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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 -0.31. The lowest was -12.72. And the median was -2.39.
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 * 1.2358||+||0.528 * 1.0021||+||0.404 * 0.9938||+||0.892 * 0.9947||+||0.115 * 1.1243|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0055||+||4.679 * 0.003||-||0.327 * 1.1051|
|This Year (Jun16) TTM:||Last Year (Jun15) TTM:|
|Accounts Receivable was $2,885 Mil.|
Revenue was 2804 + 2624 + 2863 + 2910 = $11,201 Mil.
Gross Profit was 2695 + 2527 + 2760 + 2808 = $10,790 Mil.
Total Current Assets was $8,122 Mil.
Total Assets was $222,055 Mil.
Property, Plant and Equipment(Net PPE) was $576 Mil.
Depreciation, Depletion and Amortization(DDA) was $233 Mil.
Selling, General & Admin. Expense(SGA) was $6,069 Mil.
Total Current Liabilities was $2,679 Mil.
Long-Term Debt was $4,950 Mil.
Net Income was 789 + 657 + 861 + 843 = $3,150 Mil.
Non Operating Income was 20 + -2 + 57 + -10 = $65 Mil.
Cash Flow from Operations was 467 + -565 + 1157 + 1351 = $2,410 Mil.
|Accounts Receivable was $2,347 Mil.
Revenue was 2905 + 2723 + 2784 + 2849 = $11,261 Mil.
Gross Profit was 2800 + 2624 + 2688 + 2759 = $10,871 Mil.
Total Current Assets was $7,318 Mil.
Total Assets was $237,008 Mil.
Property, Plant and Equipment(Net PPE) was $545 Mil.
Depreciation, Depletion and Amortization(DDA) was $261 Mil.
Selling, General & Admin. Expense(SGA) was $6,068 Mil.
Total Current Liabilities was $2,421 Mil.
Long-Term Debt was $4,947 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)|
|=||(2885 / 11201)||/||(2347 / 11261)|
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)|
|=||(10871 / 11261)||/||(10790 / 11201)|
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 - (8122 + 576) / 222055)||/||(1 - (7318 + 545) / 237008)|
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))|
|=||(261 / (261 + 545))||/||(233 / (233 + 576))|
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)|
|=||(6069 / 11201)||/||(6068 / 11261)|
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)|
|=||((4950 + 2679) / 222055)||/||((4947 + 2421) / 237008)|
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|
|=||(3150 - 65||-||2410)||/||222055|
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 -2.28 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