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Bank of Montreal (NYSE:BMO)
Beneish M-Score
-2.22 (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.

Bank of Montreal has a M-score of -2.22 suggests that the company is not a manipulator.

BMO' s Beneish M-Score Range Over the Past 10 Years
Min: -3.63   Max: -2.19
Current: -2.22

-3.63
-2.19

During the past 13 years, the highest Beneish M-Score of Bank of Montreal was -2.19. The lowest was -3.63. And the median was -2.49.


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 Bank of Montreal 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 * 1.2886+0.528 * 1+0.404 * 1.0003+0.892 * 0.9224+0.115 * 1.0133
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9676+4.679 * 0.0104-0.327 * 0.9729
=-2.22

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

This Year (Apr16) TTM:Last Year (Apr15) TTM:
Accounts Receivable was $574 Mil.
Revenue was 3979.55999376 + 3571.93130631 + 3811.1995104 + 3751.84638109 = $15,115 Mil.
Gross Profit was 3979.55999376 + 3571.93130631 + 3811.1995104 + 3751.84638109 = $15,115 Mil.
Total Current Assets was $0 Mil.
Total Assets was $531,641 Mil.
Property, Plant and Equipment(Net PPE) was $1,740 Mil.
Depreciation, Depletion and Amortization(DDA) was $617 Mil.
Selling, General & Admin. Expense(SGA) was $7,165 Mil.
Total Current Liabilities was $0 Mil.
Long-Term Debt was $3,622 Mil.
Net Income was 759.088781401 + 746.058558559 + 922.582619339 + 921.246987483 = $3,349 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was -2310.03276642 + 6629.36373874 + -9969.4002448 + 3496.07401073 = $-2,154 Mil.
Accounts Receivable was $483 Mil.
Revenue was 3668.63905325 + 4170.10394324 + 4138.42311809 + 4409.16286433 = $16,386 Mil.
Gross Profit was 3668.63905325 + 4170.10394324 + 4138.42311809 + 4409.16286433 = $16,386 Mil.
Total Current Assets was $0 Mil.
Total Assets was $513,314 Mil.
Property, Plant and Equipment(Net PPE) was $1,843 Mil.
Depreciation, Depletion and Amortization(DDA) was $666 Mil.
Selling, General & Admin. Expense(SGA) was $8,028 Mil.
Total Current Liabilities was $0 Mil.
Long-Term Debt was $3,595 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)
=(574.192541738 / 15114.5371916) / (483.099619032 / 16386.3289789)
=0.03798942 / 0.02948187
=1.2886

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)
=(16386.3289789 / 16386.3289789) / (15114.5371916 / 15114.5371916)
=1 / 1
=1

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 - (0 + 1739.74098923) / 531641.441723) / (1 - (0 + 1843.23579476) / 513313.609467)
=0.9967276 / 0.99640914
=1.0003

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
=15114.5371916 / 16386.3289789
=0.9224

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))
=(665.738816306 / (665.738816306 + 1843.23579476)) / (617.216124581 / (617.216124581 + 1739.74098923))
=0.26534299 / 0.2618699
=1.0133

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)
=(7165.35415902 / 15114.5371916) / (8028.44458326 / 16386.3289789)
=0.47407036 / 0.48994772
=0.9676

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)
=((3622.24996099 + 0) / 531641.441723) / ((3594.87719867 + 0) / 513313.609467)
=0.00681333 / 0.00700328
=0.9729

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
=(3348.97694678 - 0 - -2153.99526175) / 531641.441723
=0.0104

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.

Bank of Montreal has a M-score of -2.22 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.

Bank of Montreal Annual Data

Oct06Oct07Oct08Oct09Oct10Oct11Oct12Oct13Oct14Oct15
DSRI 101010.80470.83370.81690.60740.7274
GMI 1111111111
AQI 0.99991.00111.00121.00080.99931.000111.00021.0003
SGI 1.05791.08430.89811.21781.14371.12131.21510.96060.94990.9947
DEPI 1.23310.91321.1040.72950.94271.15360.82761.00731.00050.9627
SGAI 1.00611.06820.95231.23450.91281.0090.89861.02461.03751.1336
LVGI 1.44191.0350.82711.3370.81781.08690.70340.85831.12170.8243
TATA 0.00640.0439-0.0055-0.02830.02150.0054-0.0117-0.01350.01220.0032
M-score -2.52-3.15-2.52-3.52-2.18-2.54-2.40-2.70-2.87-2.69

Bank of Montreal Quarterly Data

Jan14Apr14Jul14Oct14Jan15Apr15Jul15Oct15Jan16Apr16
DSRI 0.67780.48050.5470.5460.47880.64440.68130.78071.22131.2886
GMI 1111111111
AQI 1.00021.00011.00011.00021.00031.00011.00031.00031.00011.0003
SGI 0.99071.0111.04531.05671.05951.02990.95480.92690.88680.9224
DEPI 0.96350.96860.98640.97550.96060.95340.94560.95240.95051.0133
SGAI 1.05311.05541.09431.14291.1431.12251.05011.01580.94740.9676
LVGI 0.89620.92790.91971.12171.09851.02810.97990.82431.0170.9729
TATA -0.0097-0.0051-0.00040.0120.01180.01070.00430.0020.00480.0104
M-score -2.81-2.96-2.85-2.86-2.91-2.77-2.80-2.69-2.36-2.22
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