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Ball Corp (NYSE:BLL)
Beneish M-Score
-1.71 (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 -1.71 signals that the company is a manipulator.

BLL' s Beneish M-Score Range Over the Past 10 Years
Min: -3.75   Max: -1.34
Current: -1.71

-3.75
-1.34

During the past 13 years, the highest Beneish M-Score of Ball Corp was -1.34. The lowest was -3.75. And the median was -2.69.


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 * 1.4666+0.528 * 0.9841+0.404 * 1.379+0.892 * 1.0221+0.115 * 1.2926
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9658+4.679 * 0.0251-0.327 * 0.9365
=-1.71

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $1,474 Mil.
Revenue was 2815 + 2030 + 1756 + 1805 = $8,406 Mil.
Gross Profit was 477 + 434 + 340 + 370.7 = $1,622 Mil.
Total Current Assets was $4,104 Mil.
Total Assets was $17,060 Mil.
Property, Plant and Equipment(Net PPE) was $4,440 Mil.
Depreciation, Depletion and Amortization(DDA) was $373 Mil.
Selling, General & Admin. Expense(SGA) was $459 Mil.
Total Current Liabilities was $2,943 Mil.
Long-Term Debt was $7,724 Mil.
Net Income was 0 + 338 + -127 + 54.9 = $266 Mil.
Non Operating Income was -2 + -46 + -61 + -30.5 = $-140 Mil.
Cash Flow from Operations was -469 + 422 + -386 + 409.7 = $-23 Mil.
Accounts Receivable was $983 Mil.
Revenue was 2097 + 2172 + 1923 + 2032.4 = $8,224 Mil.
Gross Profit was 407 + 397 + 362 + 395.5 = $1,562 Mil.
Total Current Assets was $2,383 Mil.
Total Assets was $7,727 Mil.
Property, Plant and Equipment(Net PPE) was $2,547 Mil.
Depreciation, Depletion and Amortization(DDA) was $283 Mil.
Selling, General & Admin. Expense(SGA) was $465 Mil.
Total Current Liabilities was $2,280 Mil.
Long-Term Debt was $2,879 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)
=(1474 / 8406) / (983.3 / 8224.4)
=0.17535094 / 0.11955887
=1.4666

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)
=(1561.5 / 8224.4) / (1621.7 / 8406)
=0.18986187 / 0.19292172
=0.9841

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 - (4104 + 4440) / 17060) / (1 - (2382.6 + 2547.3) / 7727)
=0.49917937 / 0.36199042
=1.379

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
=8406 / 8224.4
=1.0221

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))
=(283.2 / (283.2 + 2547.3)) / (372.5 / (372.5 + 4440))
=0.10005299 / 0.0774026
=1.2926

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)
=(459.3 / 8406) / (465.3 / 8224.4)
=0.05463954 / 0.05657556
=0.9658

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)
=((7724 + 2943) / 17060) / ((2879.4 + 2279.6) / 7727)
=0.62526377 / 0.66765886
=0.9365

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
=(265.9 - -139.5 - -23.3) / 17060
=0.0251

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 -1.71 signals that the company is likely to 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 local exchange's currency.

Ball Corp Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.33650.9010.73071.38341.39710.87461.01620.95320.98081.0189
GMI 1.01011.03720.97470.90870.98551.00431.00440.95050.96721.012
AQI 1.05410.98460.98761.03960.97411.01331.02290.98860.98081.3332
SGI 1.15131.1161.02320.88741.1371.13121.01210.96941.0120.9331
DEPI 1.01640.93850.92021.12741.06210.96091.08050.98481.08341.0782
SGAI 1.06691.00990.87011.20821.01550.9450.99861.12021.10121.0367
LVGI 1.04980.96241.01560.91841.03011.05991.01691.02811.01081.111
TATA -0.0252-0.0651-0.0484-0.0265-0.0055-0.0692-0.0589-0.0517-0.0673-0.0628
M-score -2.15-2.76-2.94-2.38-2.04-2.81-2.71-2.85-2.84-2.71

Ball Corp Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 0.95120.9190.98080.98671.09731.09311.01891.0921.55181.4666
GMI 0.92150.92610.96721.0031.03431.03791.0120.99570.93930.9841
AQI 1.03290.99210.98080.93940.9550.96211.33321.37681.15831.379
SGI 0.99810.9941.0121.00030.97580.96370.93310.92270.91891.0221
DEPI 1.03941.03631.08341.07631.06981.07581.07821.07051.59621.2926
SGAI 1.06721.09731.10121.13831.15941.07391.0391.01420.9750.9658
LVGI 0.97941.02121.01081.01341.00351.01061.1111.12081.12490.9365
TATA -0.0757-0.0654-0.0673-0.0666-0.0693-0.074-0.0628-0.0548-0.01440.0251
M-score -2.91-2.93-2.84-2.85-2.76-2.78-2.71-2.60-2.05-1.71
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