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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.
During the past 13 years, the highest Beneish M-Score of Canon Inc was 2163.67. The lowest was -3.75. 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 * 1.0365||+||0.528 * 0.9858||+||0.404 * 1.5461||+||0.892 * 0.8703||+||0.115 * 0.9573|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0469||+||4.679 * -0.0667||-||0.327 * 1.0098|
|This Year (Jun15) TTM:||Last Year (Jun14) TTM:|
|Accounts Receivable was $4,571 Mil.|
Revenue was 7875.98631087 + 7121.9615514 + 8882.89210909 + 8119.17446198 = $32,000 Mil.
Gross Profit was 4072.08778632 + 3642.72454306 + 4316.12266841 + 4016.41320466 = $16,047 Mil.
Total Current Assets was $17,224 Mil.
Total Assets was $36,761 Mil.
Property, Plant and Equipment(Net PPE) was $10,196 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,316 Mil.
Selling, General & Admin. Expense(SGA) was $10,435 Mil.
Total Current Liabilities was $7,355 Mil.
Long-Term Debt was $9 Mil.
Net Income was 551.210569793 + 281.823505227 + 570.634570113 + 542.225929177 = $1,946 Mil.
Non Operating Income was -23.4645396893 + -53.1751865741 + 53.8285481545 + 61.6798401127 = $39 Mil.
Cash Flow from Operations was 1012.45891887 + 826.051023926 + 1553.5691688 + 968.697434599 = $4,361 Mil.
|Accounts Receivable was $5,068 Mil.
Revenue was 9080.63556885 + 8484.58080907 + 10000.947226 + 9204.20320532 = $36,770 Mil.
Gross Profit was 4737.37273779 + 4216.16181356 + 4716.97274309 + 4506.92470517 = $18,177 Mil.
Total Current Assets was $21,331 Mil.
Total Assets was $40,110 Mil.
Property, Plant and Equipment(Net PPE) was $12,187 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,624 Mil.
Selling, General & Admin. Expense(SGA) was $11,453 Mil.
Total Current Liabilities was $7,945 Mil.
Long-Term Debt was $11 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)|
|=||(4571.34982129 / 32000.0144333)||/||(5067.67885294 / 36770.3668092)|
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)|
|=||(3642.72454306 / 36770.3668092)||/||(4072.08778632 / 32000.0144333)|
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 - (17223.8693293 + 10196.0901594) / 36761.4570485)||/||(1 - (21330.5716377 + 12187.3962037) / 40110.3633152)|
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))|
|=||(2624.49545914 / (2624.49545914 + 12187.3962037))||/||(2315.90853436 / (2315.90853436 + 10196.0901594))|
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)|
|=||(10434.8266239 / 32000.0144333)||/||(11453.1701284 / 36770.3668092)|
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)|
|=||((8.65674199352 + 7355.29661668) / 36761.4570485)||/||((11.4047317879 + 7945.45324501) / 40110.3633152)|
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|
|=||(1945.89457431 - 38.8686620038||-||4360.7765462)||/||36761.4570485|
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 -2.68 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