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Ball Corp (NYSE:BLL)
Beneish M-Score
-2.05 (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 -2.05 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: -2.05

-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 * 1.5519+0.528 * 0.9395+0.404 * 1.1583+0.892 * 0.9189+0.115 * 1.5962
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9734+4.679 * -0.0144-0.327 * 1.1249
=-2.05

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $1,524 Mil.
Revenue was 2030 + 1756 + 1804.6 + 2097 = $7,688 Mil.
Gross Profit was 434 + 340 + 370.6 + 406.7 = $1,551 Mil.
Total Current Assets was $10,086 Mil.
Total Assets was $25,077 Mil.
Property, Plant and Equipment(Net PPE) was $4,396 Mil.
Depreciation, Depletion and Amortization(DDA) was $300 Mil.
Selling, General & Admin. Expense(SGA) was $431 Mil.
Total Current Liabilities was $10,353 Mil.
Long-Term Debt was $8,234 Mil.
Net Income was 338 + -127 + 55.3 + 44.5 = $311 Mil.
Non Operating Income was -46 + -61 + -30.6 + -21 = $-159 Mil.
Cash Flow from Operations was 422 + -386 + 409.7 + 386 = $832 Mil.
Accounts Receivable was $1,069 Mil.
Revenue was 2172 + 1923 + 2032.4 + 2238.9 = $8,366 Mil.
Gross Profit was 397 + 362 + 395.5 + 431.6 = $1,586 Mil.
Total Current Assets was $2,505 Mil.
Total Assets was $7,853 Mil.
Property, Plant and Equipment(Net PPE) was $2,483 Mil.
Depreciation, Depletion and Amortization(DDA) was $282 Mil.
Selling, General & Admin. Expense(SGA) was $481 Mil.
Total Current Liabilities was $2,192 Mil.
Long-Term Debt was $2,982 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)
=(1524 / 7687.6) / (1068.7 / 8366.3)
=0.19824132 / 0.12773867
=1.5519

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)
=(1586.1 / 8366.3) / (1551.3 / 7687.6)
=0.18958201 / 0.2017925
=0.9395

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 - (10086 + 4396) / 25077) / (1 - (2505.1 + 2483.4) / 7852.9)
=0.4224987 / 0.36475697
=1.1583

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
=7687.6 / 8366.3
=0.9189

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))
=(281.5 / (281.5 + 2483.4)) / (299.5 / (299.5 + 4396))
=0.101812 / 0.06378447
=1.5962

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)
=(430.6 / 7687.6) / (481.4 / 8366.3)
=0.05601228 / 0.05754037
=0.9734

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)
=((8234 + 10353) / 25077) / ((2982.1 + 2192.3) / 7852.9)
=0.74119711 / 0.65891581
=1.1249

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
=(310.8 - -158.6 - 831.7) / 25077
=-0.0144

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 -2.05 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 own currency.

Ball Corp Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.33650.9010.73071.38341.39710.87461.01620.95320.98081.0188
GMI 1.01011.03720.97470.90870.98551.00431.00440.95050.96721.012
AQI 1.05410.98460.98761.03960.97411.01331.02290.98860.98081.3442
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 1.04980.96241.01560.91841.03011.05991.01691.02811.01081.1143
TATA -0.0252-0.0651-0.0484-0.0265-0.0055-0.0692-0.0589-0.0517-0.0673-0.0623
M-score -2.15-2.76-2.94-2.38-2.04-2.81-2.71-2.85-2.84-2.70

Ball Corp Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 0.96050.95120.9190.98080.98671.09731.09311.01891.0921.5519
GMI 0.92640.92150.92610.96721.0031.03431.03811.01220.99590.9395
AQI 1.04631.03290.99210.98080.93940.9550.96211.34421.37681.1583
SGI 0.9770.99810.9941.0121.00030.97580.96370.93310.92260.9189
DEPI 0.99561.03941.03631.08341.07631.06981.07751.07821.07051.5962
SGAI 1.081.06721.09731.10121.13831.15941.07351.03751.01260.9734
LVGI 1.01010.97941.02121.01081.01341.00351.01061.11431.12081.1249
TATA -0.066-0.0757-0.0654-0.0673-0.0666-0.0693-0.074-0.0623-0.0548-0.0144
M-score -2.88-2.91-2.93-2.84-2.85-2.76-2.78-2.70-2.60-2.05
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