Switch to:
Canon Inc (NYSE:CAJ)
Beneish M-Score
-3.01 (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.

Canon Inc has a M-score of -3.18 suggests that the company is not a manipulator.

CAJ' s 10-Year Beneish M-Score Range
Min: -3.65   Max: 2163.67
Current: -3.01

-3.65
2163.67

During the past 13 years, the highest Beneish M-Score of Canon Inc was 2163.67. The lowest was -3.65. And the median was -2.79.


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 Canon Inc 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 * 0.9306+0.528 * 0.9687+0.404 * 1.1216+0.892 * 0.8823+0.115 * 0.8253
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0492+4.679 * -0.1126-0.327 * 1.0387
=-3.18

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was $4,311 Mil.
Revenue was 7121.9615514 + 8882.89210909 + 8119.17446198 + 9080.63556885 = $33,205 Mil.
Gross Profit was 3642.72454306 + 4316.12266841 + 4016.41320466 + 4737.37273779 = $16,713 Mil.
Total Current Assets was $18,733 Mil.
Total Assets was $35,585 Mil.
Property, Plant and Equipment(Net PPE) was $10,407 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,920 Mil.
Selling, General & Admin. Expense(SGA) was $10,786 Mil.
Total Current Liabilities was $7,196 Mil.
Long-Term Debt was $10 Mil.
Net Income was 281.823505227 + 570.634570113 + 542.225929177 + 792.138965285 = $2,187 Mil.
Non Operating Income was -53.1751865741 + 53.8285481545 + 61.6798401127 + 41.5822007801 = $104 Mil.
Cash Flow from Operations was 826.051023926 + 1553.5691688 + 3710.00607862 + 0 = $6,090 Mil.
Accounts Receivable was $5,250 Mil.
Revenue was 8484.58080907 + 10000.947226 + 9204.20320532 + 9943.74453643 = $37,633 Mil.
Gross Profit was 4216.16181356 + 4716.97274309 + 4506.92470517 + 4909.32277472 = $18,349 Mil.
Total Current Assets was $21,035 Mil.
Total Assets was $39,715 Mil.
Property, Plant and Equipment(Net PPE) was $12,267 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,708 Mil.
Selling, General & Admin. Expense(SGA) was $11,652 Mil.
Total Current Liabilities was $7,731 Mil.
Long-Term Debt was $11 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)
=(4310.92782478 / 33204.6636913) / (5250.0977135 / 37633.4757768)
=0.12982899 / 0.13950605
=0.9306

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)
=(4316.12266841 / 37633.4757768) / (3642.72454306 / 33204.6636913)
=0.48758138 / 0.50332186
=0.9687

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 - (18733.1314969 + 10406.8126036) / 35584.8066149) / (1 - (21035.1573187 + 12267.2855189) / 39715.4582763)
=0.18111276 / 0.16147404
=1.1216

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
=33204.6636913 / 37633.4757768
=0.8823

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))
=(2707.7011746 / (2707.7011746 + 12267.2855189)) / (2919.59392059 / (2919.59392059 + 10406.8126036))
=0.18081493 / 0.21908336
=0.8253

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)
=(10786.4872761 / 33204.6636913) / (11651.5579774 / 37633.4757768)
=0.32484856 / 0.30960621
=1.0492

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)
=((9.56854341353 + 7195.67754341) / 35584.8066149) / ((11.1393394567 + 7730.65272621) / 39715.4582763)
=0.20248097 / 0.19493145
=1.0387

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
=(2186.8229698 - 103.915402473 - 6089.62627135) / 35584.8066149
=-0.1126

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.

Canon Inc has a M-score of -3.18 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.

Canon Inc Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.06890.99820.96690.82061.19250.86720.99661.06630.99481.0246
GMI 1.01970.97750.98861.05921.06430.92470.98531.02960.98380.9651
AQI 0.9840.97021.14161.15541.05461.12350.91261.03831.03141.1211
SGI 0.95181.11621.12861.12180.79541.24671.0280.90820.86840.8661
DEPI 1.02580.9580.85680.99641.011.06481.03821.05870.95991.0303
SGAI 0.98080.99410.99591.04171.0821.0321.01421.00161.04591.0307
LVGI 0.96950.95351.07540.85560.85431.10351.00920.93760.93581.0326
TATA -0.0589-0.0502-0.0734-0.069-0.124-0.1253-0.0534-0.0436-0.0663-0.0766
M-score -2.72-2.63-2.73-2.73-2.97-2.99-2.75-2.65-2.90-2.92

Canon Inc Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 1.01430.94281.00981.0140.98331.10050.98751.00650.96950.9306
GMI 1.02881.02211.01571.00730.98430.97390.96180.96180.9640.9687
AQI 1.03831.04841.0461.03471.03141.00341.03721.08131.12111.1216
SGI 0.95480.92740.8780.88840.87860.90580.91570.91220.91530.8823
DEPI 1.01510.95920.91710.91310.95061.0431.32730.89030.84010.8253
SGAI 1.00321.041.0621.03681.04581.02251.01891.03351.03061.0492
LVGI 0.93760.8530.94840.91320.93580.99740.91660.981.03261.0387
TATA -0.0451-0.0552-0.0519-0.0641-0.0688-0.0856-0.0417-0.1099-0.1149-0.1126
M-score -2.67-2.79-2.80-2.84-2.91-2.88-2.71-3.07-3.13-3.18
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GuruFocus Premium Plus Membership

FEEDBACK