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Ball Corporation (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 Corporation 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: -1.85
Current: -2.85

-3.01
-1.85

During the past 13 years, the highest Beneish M-Score of Ball Corporation was -1.85. The lowest was -3.01. 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 Corporation 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 * 0.9532+0.528 * 0.9505+0.404 * 0.9902+0.892 * 0.9694+0.115 * 0.9848
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1202+4.679 * -0.0517-0.327 * 1.0282
=-2.85

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $859 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.
Net Income was 124.5 + 115.2 + 95.1 + 72 = $407 Mil.
Non Operating Income was 0 + -1.3 + -26.7 + 0 = $-28 Mil.
Cash Flow from Operations was 387.1 + 509.4 + 267.1 + -324.6 = $839 Mil.
Accounts Receivable was $930 Mil.
Revenue was 2114.2 + 2282.5 + 2296.3 + 2042.7 = $8,736 Mil.
Gross Profit was 384.8 + 416.4 + 405.5 + 355 = $1,562 Mil.
Total Current Assets was $2,339 Mil.
Total Assets was $7,507 Mil.
Property, Plant and Equipment(Net PPE) was $2,277 Mil.
Depreciation, Depletion and Amortization(DDA) was $283 Mil.
Selling, General & Admin. Expense(SGA) was $386 Mil.
Total Current Liabilities was $1,686 Mil.
Long-Term Debt was $3,085 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)
=(859.4 / 8468.1) / (930.1 / 8735.7)
=0.10148676 / 0.10647115
=0.9532

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 / 8735.7) / (410.7 / 8468.1)
=0.17877216 / 0.18808233
=0.9505

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 - (2465.7 + 2372.3) / 7819.8) / (1 - (2339.4 + 2276.7) / 7507.1)
=0.3813141 / 0.3851021
=0.9902

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
=8468.1 / 8735.7
=0.9694

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))
=(282.9 / (282.9 + 2276.7)) / (299.9 / (299.9 + 2372.3))
=0.11052508 / 0.11222962
=0.9848

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)
=(418.6 / 8468.1) / (385.5 / 8735.7)
=0.04943258 / 0.04412926
=1.1202

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)
=((3182.5 + 1927.4) / 7819.8) / ((3085.3 + 1685.8) / 7507.1)
=0.65345661 / 0.63554502
=1.0282

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
=(406.8 - -28 - 839) / 7819.8
=-0.0517

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 Corporation 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 Corporation 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 Corporation Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 0.84820.94720.94780.90831.07671.00940.95810.98990.91070.9532
GMI 0.98151.00431.04661.06091.03191.00440.98310.96330.9640.9505
AQI 0.96011.01331.00631.00411.00611.02290.99751.00981.04390.9902
SGI 1.16461.13121.07621.03571.01151.01211.00250.99320.98990.9694
DEPI 0.99320.96090.95420.97441.01061.08051.04651.02381.03290.9848
SGAI 1.04440.93890.8710.87560.88030.99861.0711.08511.1441.1202
LVGI 1.10521.05991.04271.04991.00171.01691.01251.0281.02221.0282
TATA -0.0166-0.0692-0.0461-0.055-0.0612-0.0579-0.0463-0.045-0.0708-0.0517
M-score -2.62-2.74-2.65-2.75-2.64-2.72-2.75-2.74-2.93-2.85
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