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Canon Inc (NYSE:CAJ)
Beneish M-Score
-2.65 (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 -2.74 suggests that the company is not a manipulator.

CAJ' s Beneish M-Score Range Over the Past 10 Years
Min: -3.7   Max: 2196.41
Current: -2.65

-3.7
2196.41

During the past 13 years, the highest Beneish M-Score of Canon Inc was 2196.41. The lowest was -3.70. And the median was -2.86.


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 * 0.9871+0.528 * 0.9824+0.404 * 1.4532+0.892 * 0.8851+0.115 * 0.9898
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0373+4.679 * -0.0657-0.327 * 1.0042
=-2.74

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $4,204 Mil.
Revenue was 7705.37239196 + 7875.98631087 + 7121.9615514 + 8882.89210909 = $31,586 Mil.
Gross Profit was 3905.35474699 + 4072.08778632 + 3642.72454306 + 4316.12266841 = $15,936 Mil.
Total Current Assets was $17,024 Mil.
Total Assets was $36,614 Mil.
Property, Plant and Equipment(Net PPE) was $10,254 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,275 Mil.
Selling, General & Admin. Expense(SGA) was $10,364 Mil.
Total Current Liabilities was $7,251 Mil.
Long-Term Debt was $8 Mil.
Net Income was 409.329857608 + 551.210569793 + 281.823505227 + 570.634570113 = $1,813 Mil.
Non Operating Income was -34.7905409679 + -23.4645396893 + -53.1751865741 + 53.8285481545 = $-58 Mil.
Cash Flow from Operations was 883.246939598 + 1012.45891887 + 826.051023926 + 1553.5691688 = $4,275 Mil.
Accounts Receivable was $4,811 Mil.
Revenue was 8119.17446198 + 9080.63556885 + 8484.58080907 + 10000.947226 = $35,685 Mil.
Gross Profit was 4016.41320466 + 4737.37273779 + 4216.16181356 + 4716.97274309 = $17,687 Mil.
Total Current Assets was $20,411 Mil.
Total Assets was $38,843 Mil.
Property, Plant and Equipment(Net PPE) was $11,616 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,545 Mil.
Selling, General & Admin. Expense(SGA) was $11,288 Mil.
Total Current Liabilities was $7,656 Mil.
Long-Term Debt was $13 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)
=(4203.76270521 / 31586.2123633) / (4811.17646895 / 35685.3380659)
=0.13308853 / 0.13482222
=0.9871

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)
=(4072.08778632 / 35685.3380659) / (3905.35474699 / 31586.2123633)
=0.4956355 / 0.5045331
=0.9824

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 - (17023.6359278 + 10254.2705805) / 36614.3143933) / (1 - (20411.1772136 + 11615.8330828) / 38842.8281128)
=0.25499338 / 0.17547172
=1.4532

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
=31586.2123633 / 35685.3380659
=0.8851

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))
=(2544.70063293 / (2544.70063293 + 11615.8330828)) / (2274.62570339 / (2274.62570339 + 10254.2705805))
=0.17970372 / 0.18155037
=0.9898

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)
=(10363.974007 / 31586.2123633) / (11288.1109687 / 35685.3380659)
=0.32811702 / 0.3163235
=1.0373

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)
=((8.08172614351 + 7251.25595518) / 36614.3143933) / ((12.7064566486 + 7656.13814944) / 38842.8281128)
=0.19826502 / 0.1974327
=1.0042

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
=(1812.99850274 - -57.6017190769 - 4275.3260512) / 36614.3143933
=-0.0657

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 -2.74 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.99820.96690.82061.19250.86720.99661.06630.99481.02460.9498
GMI 0.97750.98861.05921.06430.92470.98531.02960.98380.96510.9812
AQI 0.97021.14161.15541.05461.12350.91261.03831.03141.12111.4509
SGI 1.11621.12861.12180.79541.24671.0280.90820.86840.86611.0002
DEPI 0.9580.85680.99641.011.06481.03821.05870.95991.03030.9388
SGAI 0.99410.99591.04171.0821.0321.01421.00161.04591.03071.0317
LVGI 0.95351.07540.85560.85431.10351.00920.93760.93581.03260.8913
TATA -0.0502-0.0734-0.069-0.124-0.1253-0.0534-0.0436-0.0663-0.0766-0.0546
M-score -2.63-2.73-2.73-2.97-2.99-2.75-2.65-2.90-2.92-2.59

Canon Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 1.0140.98331.10050.98751.00650.96950.93061.00340.98711.05
GMI 1.00730.98430.97390.96180.96180.9640.96870.98580.98240.9825
AQI 1.03471.03141.00341.03721.08131.12111.12161.54611.45321.4509
SGI 0.88840.87860.90580.91570.91220.91530.88230.87030.88510.9048
DEPI 0.91310.95061.0431.0631.03970.98530.97180.95730.98981.019
SGAI 1.03681.04581.02251.01891.03351.03061.04921.04691.03731.0317
LVGI 0.91320.93580.99740.91660.981.03261.03871.00981.00420.8913
TATA -0.0641-0.0688-0.0856-0.0813-0.0803-0.0841-0.0802-0.0667-0.0657-0.0547
M-score -2.84-2.91-2.88-2.92-2.91-2.96-3.02-2.71-2.74-2.57
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