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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 -3.62. And the median was -2.73.
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 * 1.0837||+||0.528 * 0.9906||+||0.404 * 2.0221||+||0.892 * 0.94||+||0.115 * 1.0665|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0248||+||4.679 * -0.0539||-||0.327 * 1.4696|
|This Year (Mar16) TTM:||Last Year (Mar15) TTM:|
|Accounts Receivable was $4,391 Mil.|
Revenue was 7059.39961942 + 8571.85842891 + 7705.37239196 + 7875.98631087 = $31,213 Mil.
Gross Profit was 3583.98926077 + 4298.17075677 + 3905.35474699 + 4072.08778632 = $15,860 Mil.
Total Current Assets was $16,518 Mil.
Total Assets was $42,850 Mil.
Property, Plant and Equipment(Net PPE) was $10,639 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,248 Mil.
Selling, General & Admin. Expense(SGA) was $10,391 Mil.
Total Current Liabilities was $12,744 Mil.
Long-Term Debt was $7 Mil.
Net Income was 247.857775983 + 566.481687014 + 409.329857608 + 551.210569793 = $1,775 Mil.
Non Operating Income was 42.0342561035 + 6.5441690303 + -34.7905409679 + -23.4645396893 = $-10 Mil.
Cash Flow from Operations was 1014.96745378 + 1182.98187199 + 883.246939598 + 1012.45891887 = $4,094 Mil.
|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 $2,379 Mil.
Selling, General & Admin. Expense(SGA) was $10,786 Mil.
Total Current Liabilities was $7,196 Mil.
Long-Term Debt was $10 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)|
|=||(4391.36221274 / 31212.6167512)||/||(4310.92782478 / 33204.6636913)|
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)|
|=||(16712.6331539 / 33204.6636913)||/||(15859.6025508 / 31212.6167512)|
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 - (16518.0635729 + 10639.4395905) / 42850.298012)||/||(1 - (18733.1314969 + 10406.8126036) / 35584.8066149)|
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))|
|=||(2378.8880832 / (2378.8880832 + 10406.8126036))||/||(2248.39679988 / (2248.39679988 + 10639.4395905))|
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)|
|=||(10390.7768931 / 31212.6167512)||/||(10786.4872761 / 33204.6636913)|
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)|
|=||((7.03079826125 + 12743.6317704) / 42850.298012)||/||((9.56854341353 + 7195.67754341) / 35584.8066149)|
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|
|=||(1774.8798904 - -9.67665552344||-||4093.65518424)||/||42850.298012|
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 -2.45 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