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Brady Corp (NYSE:BRC)
Beneish M-Score
-2.81 (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.

Brady Corp has a M-score of -2.81 suggests that the company is not a manipulator.

BRC' s Beneish M-Score Range Over the Past 10 Years
Min: -3.74   Max: -1.85
Current: -2.81

-3.74
-1.85

During the past 13 years, the highest Beneish M-Score of Brady Corp was -1.85. The lowest was -3.74. And the median was -2.62.


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 Brady 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 * 0.9382+0.528 * 0.9553+0.404 * 0.9706+0.892 * 0.9766+0.115 * 1.1238
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9951+4.679 * -0.0554-0.327 * 0.913
=-2.81

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Oct16) TTM:Last Year (Oct15) TTM:
Accounts Receivable was $146 Mil.
Revenue was 280.176 + 282.106 + 286.816 + 268.63 = $1,118 Mil.
Gross Profit was 140.358 + 141.089 + 145.443 + 132.892 = $560 Mil.
Total Current Assets was $430 Mil.
Total Assets was $1,050 Mil.
Property, Plant and Equipment(Net PPE) was $100 Mil.
Depreciation, Depletion and Amortization(DDA) was $31 Mil.
Selling, General & Admin. Expense(SGA) was $402 Mil.
Total Current Liabilities was $165 Mil.
Long-Term Debt was $211 Mil.
Net Income was 22.553 + 25.136 + 20.981 + 15.29 = $84 Mil.
Non Operating Income was -0.489 + 0.321 + 0.721 + -0.992 = $-0 Mil.
Cash Flow from Operations was 33.993 + 40.426 + 40.296 + 27.884 = $143 Mil.
Accounts Receivable was $159 Mil.
Revenue was 283.073 + 288.636 + 290.227 + 282.628 = $1,145 Mil.
Gross Profit was 139.349 + 129.069 + 140.999 + 138.203 = $548 Mil.
Total Current Assets was $407 Mil.
Total Assets was $1,049 Mil.
Property, Plant and Equipment(Net PPE) was $106 Mil.
Depreciation, Depletion and Amortization(DDA) was $38 Mil.
Selling, General & Admin. Expense(SGA) was $414 Mil.
Total Current Liabilities was $170 Mil.
Long-Term Debt was $241 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)
=(145.831 / 1117.728) / (159.174 / 1144.564)
=0.13047092 / 0.13906955
=0.9382

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)
=(547.62 / 1144.564) / (559.782 / 1117.728)
=0.47845293 / 0.50082131
=0.9553

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 - (429.926 + 99.824) / 1050.267) / (1 - (407.208 + 106.108) / 1048.849)
=0.49560445 / 0.51059113
=0.9706

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
=1117.728 / 1144.564
=0.9766

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))
=(38.224 / (38.224 + 106.108)) / (30.777 / (30.777 + 99.824))
=0.26483386 / 0.23565669
=1.1238

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)
=(402.422 / 1117.728) / (414.103 / 1144.564)
=0.36003572 / 0.36179978
=0.9951

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)
=((210.608 + 165.498) / 1050.267) / ((241.434 + 169.96) / 1048.849)
=0.35810513 / 0.39223377
=0.913

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
=(83.96 - -0.439 - 142.599) / 1050.267
=-0.0554

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.

Brady Corp has a M-score of -2.81 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 local exchange's currency.

Brady Corp Annual Data

Jul07Jul08Jul09Jul10Jul11Jul12Jul13Jul14Jul15Jul16
DSRI 0.95290.98020.91791.11281.22540.86110.78710.99190.92620.9788
GMI 1.07060.98681.02260.96530.89191.00631.04791.05771.04410.9558
AQI 0.98680.95751.09810.91660.96970.99381.08670.93580.99940.9788
SGI 1.3381.11770.79361.04170.84141.01151.08051.05810.95650.9564
DEPI 0.85170.89790.98990.99291.03241.02330.88661.1430.95261.0891
SGAI 0.99070.98791.00921.05361.08380.97681.00830.99880.97741.002
LVGI 1.07210.92660.86840.46810.96412.0021.12320.9871.07110.941
TATA -0.0174-0.0531-0.0368-0.0484-0.0337-0.1024-0.2096-0.1131-0.0858-0.0557
M-score -2.31-2.65-2.82-2.45-2.64-3.40-3.58-2.94-2.99-2.80

Brady Corp Quarterly Data

Jul14Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16
DSRI 0.9910.92350.89570.92460.92620.97611.07261.00610.97880.9382
GMI 1.05761.05471.041.03491.04411.02461.02181.00240.95580.9553
AQI 0.93580.950.95840.95760.99940.98580.96050.95130.97880.9706
SGI 1.05911.02891.00610.98440.95650.93220.92730.93940.95640.9766
DEPI 1.1431.15841.14521.09070.95260.91750.9250.91231.08911.1238
SGAI 0.99790.98780.99810.97810.97740.98990.9861.01131.0020.9951
LVGI 0.9871.0741.09051.0561.07111.01591.05061.02230.9410.913
TATA -0.1131-0.1184-0.1221-0.1224-0.0858-0.0923-0.1109-0.1154-0.0557-0.0554
M-score -2.94-3.07-3.15-3.14-2.99-3.00-3.02-3.11-2.80-2.81
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