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Ball Corp (NYSE:BLL)
Beneish M-Score
-2.85 (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 -2.85 suggests that the company is not a manipulator.

BLL' s 10-Year Beneish M-Score Range
Min: -3.01   Max: -1.8
Current: -2.85

-3.01
-1.8

During the past 13 years, the highest Beneish M-Score of Ball Corp was -1.80. The lowest was -3.01. And the median was -2.70.


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 * 0.9808+0.528 * 0.9672+0.404 * 0.9792+0.892 * 1.012+0.115 * 1.0834
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2709+4.679 * -0.0629-0.327 * 1.0108
=-2.85

* 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 $793 Mil.
Revenue was 2032.4 + 2238.9 + 2291.9 + 2006.8 = $8,570 Mil.
Gross Profit was 395.5 + 431.6 + 445.5 + 393.9 = $1,667 Mil.
Total Current Assets was $2,314 Mil.
Total Assets was $7,571 Mil.
Property, Plant and Equipment(Net PPE) was $2,431 Mil.
Depreciation, Depletion and Amortization(DDA) was $281 Mil.
Selling, General & Admin. Expense(SGA) was $538 Mil.
Total Current Liabilities was $2,007 Mil.
Long-Term Debt was $2,994 Mil.
Net Income was 76 + 147.4 + 153.1 + 93.5 = $470 Mil.
Non Operating Income was -33.1 + 0 + 0 + -33.1 = $-66 Mil.
Cash Flow from Operations was 362.5 + 440 + 346.2 + -136.2 = $1,013 Mil.
Accounts Receivable was $799 Mil.
Revenue was 1996.8 + 2277.9 + 2202.4 + 1991 = $8,468 Mil.
Gross Profit was 410.7 + 431 + 403.5 + 347.5 = $1,593 Mil.
Total Current Assets was $2,466 Mil.
Total Assets was $7,820 Mil.
Property, Plant and Equipment(Net PPE) was $2,372 Mil.
Depreciation, Depletion and Amortization(DDA) was $300 Mil.
Selling, General & Admin. Expense(SGA) was $419 Mil.
Total Current Liabilities was $1,927 Mil.
Long-Term Debt was $3,183 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)
=(793 / 8570) / (798.9 / 8468.1)
=0.09253209 / 0.0943423
=0.9808

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)
=(431.6 / 8468.1) / (395.5 / 8570)
=0.18808233 / 0.19445741
=0.9672

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 - (2313.5 + 2430.7) / 7571) / (1 - (2465.7 + 2372.3) / 7819.8)
=0.37337208 / 0.3813141
=0.9792

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
=8570 / 8468.1
=1.012

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))
=(299.9 / (299.9 + 2372.3)) / (280.9 / (280.9 + 2430.7))
=0.11222962 / 0.10359198
=1.0834

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)
=(538.4 / 8570) / (418.6 / 8468.1)
=0.0628238 / 0.04943258
=1.2709

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)
=((2993.8 + 2006.8) / 7571) / ((3182.5 + 1927.4) / 7819.8)
=0.66049399 / 0.65345661
=1.0108

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
=(470 - -66.2 - 1012.5) / 7571
=-0.0629

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 -2.85 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.02721.33650.9010.73071.07081.80490.87461.01620.95320.9808
GMI 1.1351.01011.03720.97470.93120.96171.00431.00440.95050.9672
AQI 0.94291.05410.98460.98761.0990.92150.99661.03580.99430.9792
SGI 1.05721.15131.1161.02320.97141.03881.13121.01210.96941.012
DEPI 1.02051.01640.93850.92021.07651.11240.97811.06640.98031.0834
SGAI 0.82281.06691.00990.87011.17371.04530.9450.99861.12021.2912
LVGI 1.07341.04980.96241.01560.9181.03051.05991.01691.02821.0108
TATA -0.0649-0.0277-0.0672-0.0507-0.0286-0.0068-0.0692-0.0579-0.0517-0.0673
M-score -2.65-2.16-2.77-2.95-2.56-1.79-2.81-2.71-2.85-2.87

Ball Corp Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 1.08771.01620.9440.92590.89950.95320.96050.95120.9190.9808
GMI 1.03191.00440.98310.96330.9640.95050.92640.92150.92610.9672
AQI 1.00611.03580.99751.00981.04390.99431.04631.03290.99210.9792
SGI 1.01151.01211.00250.99320.98990.96940.9770.99810.9941.012
DEPI 1.01061.06641.04651.02381.03290.98030.99561.03941.03631.0834
SGAI 1.07860.99111.00241.00170.86971.12021.09221.08671.25351.2709
LVGI 1.00171.01691.01251.0281.02221.02821.01010.97941.02121.0108
TATA -0.0612-0.0579-0.0463-0.045-0.0708-0.0517-0.0695-0.0754-0.0638-0.0629
M-score -2.67-2.70-2.76-2.79-2.90-2.85-2.90-2.91-2.95-2.85
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