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Ball Corp (NYSE:BLL)
Beneish M-Score
-2.88 (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 -2.88 suggests that the company is not a manipulator.

BLL' s 10-Year Beneish M-Score Range
Min: -3.2   Max: -1.74
Current: -2.88

-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 * 0.919+0.528 * 0.9261+0.404 * 0.9921+0.892 * 0.994+0.115 * 1.0363
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8156+4.679 * -0.0654-0.327 * 1.0212
=-2.88

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $934 Mil.
Revenue was 2238.9 + 2291.9 + 2006.8 + 1996.8 = $8,534 Mil.
Gross Profit was 431.6 + 445.5 + 393.9 + 410.7 = $1,682 Mil.
Total Current Assets was $2,379 Mil.
Total Assets was $7,615 Mil.
Property, Plant and Equipment(Net PPE) was $2,371 Mil.
Depreciation, Depletion and Amortization(DDA) was $286 Mil.
Selling, General & Admin. Expense(SGA) was $370 Mil.
Total Current Liabilities was $2,022 Mil.
Long-Term Debt was $3,009 Mil.
Net Income was 147.4 + 153.1 + 93.5 + 124.5 = $519 Mil.
Non Operating Income was 0 + 0 + -33.1 + -28 = $-61 Mil.
Cash Flow from Operations was 440 + 346.2 + -136.2 + 427.7 = $1,078 Mil.
Accounts Receivable was $1,022 Mil.
Revenue was 2277.9 + 2202.4 + 1991 + 2114.2 = $8,586 Mil.
Gross Profit was 431 + 403.5 + 347.5 + 384.8 = $1,567 Mil.
Total Current Assets was $2,425 Mil.
Total Assets was $7,709 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 $456 Mil.
Total Current Liabilities was $1,570 Mil.
Long-Term Debt was $3,418 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)
=(933.5 / 8534.4) / (1021.9 / 8585.5)
=0.10938086 / 0.11902627
=0.919

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)
=(445.5 / 8585.5) / (431.6 / 8534.4)
=0.18249374 / 0.19704959
=0.9261

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 - (2378.8 + 2371.1) / 7614.9) / (1 - (2425.4 + 2360.1) / 7709.2)
=0.37623606 / 0.37924817
=0.9921

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
=8534.4 / 8585.5
=0.994

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))
=(296.3 / (296.3 + 2360.1)) / (286 / (286 + 2371.1))
=0.11154194 / 0.10763614
=1.0363

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)
=(369.7 / 8534.4) / (456 / 8585.5)
=0.0433188 / 0.05311281
=0.8156

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)
=((3009 + 2021.9) / 7614.9) / ((3417.5 + 1570.2) / 7709.2)
=0.66066527 / 0.64698023
=1.0212

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
=(518.5 - -61.1 - 1077.7) / 7614.9
=-0.0654

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 -2.88 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 1.26861.02721.33650.9010.73071.38341.39710.87461.01620.9532
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 -2.45-2.65-2.16-2.77-2.95-2.38-2.04-2.81-2.71-2.85

Ball Corp Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.9731.08771.01620.9440.92590.89950.95320.96050.95120.919
GMI 1.06091.03191.00440.98310.96330.9640.95050.92640.92150.9261
AQI 1.00411.00611.02290.99751.00981.04390.99021.04631.03290.9921
SGI 1.03571.01151.01211.00250.99320.98990.96940.9770.99810.994
DEPI 0.97441.01061.08051.04651.02381.03290.98480.99561.03941.0363
SGAI 0.87560.88030.99861.0711.08511.26550.9990.96270.95350.8156
LVGI 1.04991.00171.01691.01251.0281.02221.02821.01010.97941.0212
TATA -0.055-0.0612-0.0579-0.0463-0.0413-0.0657-0.0483-0.066-0.0757-0.0654
M-score -2.69-2.63-2.71-2.77-2.78-2.94-2.82-2.86-2.89-2.88
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