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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 -2.86 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Canon, Inc. was -2.55. The lowest was -3.61. And the median was -2.78.
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 * 1.0341||+||0.528 * 0.9849||+||0.404 * 1.0314||+||0.892 * 0.8812||+||0.115 * 0.9938|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0457||+||4.679 * -0.0684||-||0.327 * 0.9358|
|This Year (Dec13) TTM:||Last Year (Dec12) TTM:|
|Accounts Receivable was $5,867 Mil.|
Revenue was 9971.93550563 + 9339.76679963 + 9700.5207027 + 8353.82270505 = $37,366 Mil.
Gross Profit was 4703.28928981 + 4573.30469469 + 4789.24081747 + 3947.6359991 = $18,013 Mil.
Total Current Assets was $22,031 Mil.
Total Assets was $40,889 Mil.
Property, Plant and Equipment(Net PPE) was $12,324 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,758 Mil.
Selling, General & Admin. Expense(SGA) was $11,566 Mil.
Total Current Liabilities was $8,176 Mil.
Long-Term Debt was $14 Mil.
Net Income was 619.230732163 + 601.636493812 + 667.141552878 + 418.51306287 = $2,307 Mil.
Non Operating Income was 45.6626285406 + -40.3600286386 + -10.4842836074 + 46.5537347327 = $41 Mil.
Cash Flow from Operations was 1583.60077486 + 1282.98046436 + 1630.08036279 + 566.848748951 = $5,064 Mil.
|Accounts Receivable was $6,438 Mil.
Revenue was 10682.858362 + 10124.2706896 + 11391.714702 + 10205.77955 = $42,405 Mil.
Gross Profit was 4855.1730333 + 4894.82743346 + 5573.20580224 + 4810.9338847 = $20,134 Mil.
Total Current Assets was $23,381 Mil.
Total Assets was $44,415 Mil.
Property, Plant and Equipment(Net PPE) was $14,152 Mil.
Depreciation, Depletion and Amortization(DDA) was $3,143 Mil.
Selling, General & Admin. Expense(SGA) was $12,553 Mil.
Total Current Liabilities was $9,482 Mil.
Long-Term Debt was $24 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)|
|=||(5866.76111448 / 37366.045713)||/||(6438.22003638 / 42404.6233036)|
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)|
|=||(4573.30469469 / 42404.6233036)||/||(4703.28928981 / 37366.045713)|
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 - (22030.8401037 + 12323.8018138) / 40889.2551151)||/||(1 - (23380.8978419 + 14152.1704956) / 44414.9093849)|
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))|
|=||(3142.77851437 / (3142.77851437 + 14152.1704956))||/||(2757.65671303 / (2757.65671303 + 12323.8018138))|
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)|
|=||(11566.0369006 / 37366.045713)||/||(12552.5776692 / 42404.6233036)|
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)|
|=||((13.9551469242 + 8175.58620291) / 40889.2551151)||/||((23.7710256238 + 9481.85452177) / 44414.9093849)|
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|
|=||(2306.52184172 - 41.3720510273||-||5063.51035095)||/||40889.2551151|
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 -2.86 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