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Ball Corp (NYSE:BLL)
Beneish M-Score
-2.92 (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 -2.92 suggests that the company is not a manipulator.

BLL' s 10-Year Beneish M-Score Range
Min: -3.2   Max: -1.74
Current: -2.92

-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 -2.67.


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 * 0.957+0.528 * 0.9215+0.404 * 1.0329+0.892 * 0.9981+0.115 * 1.0394
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0672+4.679 * -0.0791-0.327 * 0.9794
=-2.92

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $1,074 Mil.
Revenue was 2291.9 + 2006.8 + 1996.8 + 2277.9 = $8,573 Mil.
Gross Profit was 445.5 + 393.9 + 410.7 + 431 = $1,681 Mil.
Total Current Assets was $2,420 Mil.
Total Assets was $7,771 Mil.
Property, Plant and Equipment(Net PPE) was $2,383 Mil.
Depreciation, Depletion and Amortization(DDA) was $291 Mil.
Selling, General & Admin. Expense(SGA) was $426 Mil.
Total Current Liabilities was $1,974 Mil.
Long-Term Debt was $3,129 Mil.
Net Income was 153.1 + 93.5 + 124.5 + 115.2 = $486 Mil.
Non Operating Income was 0 + -33.1 + 0 + -1.3 = $-34 Mil.
Cash Flow from Operations was 346.2 + -136.2 + 387.1 + 538.5 = $1,136 Mil.
Accounts Receivable was $1,124 Mil.
Revenue was 2202.4 + 1991 + 2114.2 + 2282.5 = $8,590 Mil.
Gross Profit was 403.5 + 347.5 + 384.8 + 416.4 = $1,552 Mil.
Total Current Assets was $2,620 Mil.
Total Assets was $7,816 Mil.
Property, Plant and Equipment(Net PPE) was $2,306 Mil.
Depreciation, Depletion and Amortization(DDA) was $294 Mil.
Selling, General & Admin. Expense(SGA) was $400 Mil.
Total Current Liabilities was $1,767 Mil.
Long-Term Debt was $3,473 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)
=(1073.5 / 8573.4) / (1123.9 / 8590.1)
=0.12521287 / 0.13083666
=0.957

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)
=(393.9 / 8590.1) / (445.5 / 8573.4)
=0.18069638 / 0.19608323
=0.9215

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 - (2419.8 + 2383.3) / 7771.4) / (1 - (2619.5 + 2306.1) / 7815.6)
=0.38195177 / 0.36977327
=1.0329

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
=8573.4 / 8590.1
=0.9981

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))
=(294.4 / (294.4 + 2306.1)) / (291.3 / (291.3 + 2383.3))
=0.113209 / 0.10891348
=1.0394

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)
=(425.5 / 8573.4) / (399.5 / 8590.1)
=0.04963025 / 0.04650703
=1.0672

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)
=((3129.2 + 1973.6) / 7771.4) / ((3472.6 + 1767.4) / 7815.6)
=0.65661271 / 0.67045396
=0.9794

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
=(486.3 - -34.4 - 1135.6) / 7771.4
=-0.0791

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 -2.92 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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