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Ball Corp (NYSE:BLL)
Beneish M-Score
-2.91 (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.

Ball Corp has a M-score of -2.91 suggests that the company is not a manipulator.

BLL' s 10-Year Beneish M-Score Range
Min: -3.2   Max: -1.74
Current: -2.91

-3.2
-1.74

During the past 13 years, the highest Beneish M-Score of Ball Corp was -1.74. The lowest was -3.20. And the median was -2.66.


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 Ball 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 * 0.9495+0.528 * 0.9264+0.404 * 1.0463+0.892 * 0.977+0.115 * 0.9956
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.08+4.679 * -0.0695-0.327 * 1.0101
=-2.91

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $981 Mil.
Revenue was 2006.8 + 1996.8 + 2277.9 + 2202.4 = $8,484 Mil.
Gross Profit was 393.9 + 410.7 + 431 + 403.5 = $1,639 Mil.
Total Current Assets was $2,404 Mil.
Total Assets was $7,745 Mil.
Property, Plant and Equipment(Net PPE) was $2,360 Mil.
Depreciation, Depletion and Amortization(DDA) was $296 Mil.
Selling, General & Admin. Expense(SGA) was $417 Mil.
Total Current Liabilities was $1,821 Mil.
Long-Term Debt was $3,358 Mil.
Net Income was 93.5 + 124.5 + 115.2 + 95.1 = $428 Mil.
Non Operating Income was -33.1 + 0 + -1.3 + -26.7 = $-61 Mil.
Cash Flow from Operations was -136.2 + 387.1 + 538.5 + 238 = $1,027 Mil.
Accounts Receivable was $1,058 Mil.
Revenue was 1991 + 2114.2 + 2282.5 + 2296.3 = $8,684 Mil.
Gross Profit was 347.5 + 384.8 + 416.4 + 405.5 = $1,554 Mil.
Total Current Assets was $2,623 Mil.
Total Assets was $7,776 Mil.
Property, Plant and Equipment(Net PPE) was $2,294 Mil.
Depreciation, Depletion and Amortization(DDA) was $286 Mil.
Selling, General & Admin. Expense(SGA) was $395 Mil.
Total Current Liabilities was $1,743 Mil.
Long-Term Debt was $3,405 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)
=(981.1 / 8483.9) / (1057.7 / 8684)
=0.11564257 / 0.12179871
=0.9495

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)
=(410.7 / 8684) / (393.9 / 8483.9)
=0.17897282 / 0.19320124
=0.9264

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 - (2404.3 + 2360.2) / 7744.5) / (1 - (2622.7 + 2293.5) / 7776)
=0.38478921 / 0.36777263
=1.0463

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
=8483.9 / 8684
=0.977

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))
=(286.4 / (286.4 + 2293.5)) / (296.2 / (296.2 + 2360.2))
=0.11101205 / 0.11150429
=0.9956

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)
=(417 / 8483.9) / (395.2 / 8684)
=0.04915192 / 0.04550898
=1.08

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)
=((3357.7 + 1821.3) / 7744.5) / ((3405.3 + 1742.9) / 7776)
=0.66873265 / 0.66206276
=1.0101

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
=(428.3 - -61.1 - 1027.4) / 7744.5
=-0.0695

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.

Ball Corp has a M-score of -2.91 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.

Ball Corp Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.26861.02721.33650.9011.23670.81741.39710.94721.00940.9532
GMI 0.94911.1351.01011.03720.97470.90870.98551.00431.00440.9505
AQI 0.92230.94291.05410.98460.98761.03960.97411.01331.02290.9902
SGI 1.09311.05721.15131.1161.02320.88741.1371.13121.01210.9694
DEPI 0.99581.02051.01640.93850.92021.12741.06210.96091.08050.9848
SGAI 1.10970.82281.06691.00990.87011.20821.01550.9450.99861.1202
LVGI 0.94371.07341.04980.96241.01560.91841.03011.05991.01691.0282
TATA -0.0523-0.0649-0.0277-0.0672-0.0507-0.0265-0.0055-0.0692-0.0579-0.0517
M-score -2.45-2.65-2.16-2.77-2.49-2.90-2.04-2.74-2.72-2.85

Ball Corp Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.94780.90831.07671.00940.95810.98990.91070.95320.94950.957
GMI 1.04661.06091.03191.00440.98310.96330.9640.95050.92640.9215
AQI 1.00631.00411.00611.02290.99751.00981.04390.99021.04631.0329
SGI 1.07621.03571.01151.01211.00250.99320.98990.96940.9770.9981
DEPI 0.95420.97441.01061.08051.04651.02381.03290.98480.99561.0394
SGAI 0.8710.87560.88030.99861.0711.08511.1441.12021.081.0672
LVGI 1.04271.04991.00171.01691.01251.0281.02221.02821.01010.9794
TATA -0.0461-0.055-0.0612-0.0579-0.0463-0.0413-0.0708-0.0517-0.0695-0.0791
M-score -2.65-2.75-2.64-2.72-2.75-2.73-2.93-2.85-2.91-2.92
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