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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 -2.65 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Canon Inc was 2163.67. The lowest was -3.62. And the median was -2.76.
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 * 1.0108||+||0.528 * 0.9623||+||0.404 * 1.0372||+||0.892 * 0.9494||+||0.115 * 1.3182|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0185||+||4.679 * -0.0417||-||0.327 * 0.9166|
|This Year (Jun14) TTM:||Last Year (Jun13) TTM:|
|Accounts Receivable was $5,246 Mil.|
Revenue was 9109.45547474 + 8474.80919011 + 9971.93550563 + 9339.76679963 = $36,896 Mil.
Gross Profit was 4752.40809908 + 4211.30609616 + 4703.28928981 + 4573.30469469 = $18,240 Mil.
Total Current Assets was $21,398 Mil.
Total Assets was $40,238 Mil.
Property, Plant and Equipment(Net PPE) was $12,226 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,023 Mil.
Selling, General & Admin. Expense(SGA) was $11,492 Mil.
Total Current Liabilities was $7,971 Mil.
Long-Term Debt was $11 Mil.
Net Income was 794.653037154 + 464.678209608 + 619.230732163 + 601.636493812 = $2,480 Mil.
Non Operating Income was 41.7141733831 + -48.302719163 + 45.6626285406 + -40.3600286386 = $-1 Mil.
Cash Flow from Operations was 0 + 1290.81184485 + 1583.60077486 + 1282.98046436 = $4,157 Mil.
|Accounts Receivable was $5,467 Mil.
Revenue was 9700.5207027 + 8353.82270505 + 10682.858362 + 10124.2706896 = $38,861 Mil.
Gross Profit was 4789.24081747 + 3947.6359991 + 4855.1730333 + 4894.82743346 = $18,487 Mil.
Total Current Assets was $21,814 Mil.
Total Assets was $41,230 Mil.
Property, Plant and Equipment(Net PPE) was $12,883 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,966 Mil.
Selling, General & Admin. Expense(SGA) was $11,884 Mil.
Total Current Liabilities was $8,906 Mil.
Long-Term Debt was $16 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(5246.41242383 / 36895.9669701)||/||(5466.75629308 / 38861.4724593)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(4211.30609616 / 38861.4724593)||/||(4752.40809908 / 36895.9669701)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (21398.2701003 + 12226.0762729) / 40237.6646353)||/||(1 - (21813.9616546 + 12882.7064501) / 41230.0823693)|
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.
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))|
|=||(2966.18659986 / (2966.18659986 + 12882.7064501))||/||(2022.96396246 / (2022.96396246 + 12226.0762729))|
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)|
|=||(11491.8508866 / 36895.9669701)||/||(11883.9468342 / 38861.4724593)|
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)|
|=||((11.4409278553 + 7970.67033615) / 40237.6646353)||/||((16.4638367462 + 8906.44407212) / 41230.0823693)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(2480.19847274 - -1.28594587789||-||4157.39308407)||/||40237.6646353|
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 -2.65 suggests that the company will not be a manipulator.
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
Canon Inc Annual Data
Canon Inc Quarterly Data