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Canon Inc (NYSE:CAJ)
Beneish M-Score
-2.95 (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 -2.77 suggests that the company is not a manipulator.

CAJ' s Beneish M-Score Range Over the Past 10 Years
Min: -3.62   Max: 2163.67
Current: -2.95

-3.62
2163.67

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.


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 * 0.9823+0.528 * 0.9941+0.404 * 1.4357+0.892 * 0.9844+0.115 * 1.073
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0287+4.679 * -0.061-0.327 * 1.4735
=-2.77

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $4,279 Mil.
Revenue was 8165.53062195 + 7059.39961942 + 8571.85842891 + 7705.37239196 = $31,502 Mil.
Gross Profit was 4104.07504824 + 3583.98926077 + 4298.17075677 + 3905.35474699 = $15,892 Mil.
Total Current Assets was $16,826 Mil.
Total Assets was $43,804 Mil.
Property, Plant and Equipment(Net PPE) was $10,997 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,292 Mil.
Selling, General & Admin. Expense(SGA) was $10,568 Mil.
Total Current Liabilities was $12,923 Mil.
Long-Term Debt was $7 Mil.
Net Income was 507.333112484 + 247.857775983 + 566.481687014 + 409.329857608 = $1,731 Mil.
Non Operating Income was 107.374497987 + 42.0342561035 + 6.5441690303 + -34.7905409679 = $121 Mil.
Cash Flow from Operations was 1201.55594304 + 1014.96745378 + 1182.98187199 + 883.246939598 = $4,283 Mil.
Accounts Receivable was $4,425 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.



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)
=(4279.43187956 / 31502.1610622) / (4425.28447622 / 32000.0144333)
=0.13584566 / 0.13829008
=0.9823

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)
=(16047.3482025 / 32000.0144333) / (15891.5898128 / 31502.1610622)
=0.50147941 / 0.50446031
=0.9941

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 - (16825.9027687 + 10996.8590681) / 43804.3054212) / (1 - (17223.8693293 + 10196.0901594) / 36761.4570485)
=0.36483956 / 0.25411119
=1.4357

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
=31502.1610622 / 32000.0144333
=0.9844

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))
=(2315.90853436 / (2315.90853436 + 10196.0901594)) / (2292.35792888 / (2292.35792888 + 10996.8590681))
=0.18509501 / 0.17249759
=1.073

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)
=(10567.7437305 / 31502.1610622) / (10434.8266239 / 32000.0144333)
=0.33546091 / 0.32608818
=1.0287

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)
=((6.73938238781 + 12922.6233473) / 43804.3054212) / ((8.65674199352 + 7355.29661668) / 36761.4570485)
=0.29516192 / 0.20031723
=1.4735

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
=(1731.00243309 - 121.162382153 - 4282.75220841) / 43804.3054212
=-0.061

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 -2.77 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 0.99820.96690.82061.19250.86720.99661.06630.99481.0450.9224
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 -2.63-2.73-2.73-2.97-2.99-2.75-2.65-2.90-2.90-2.61

Canon Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 1.10050.98751.00650.98890.93061.00340.98711.01971.08370.9823
GMI 0.97390.96180.96180.9640.96870.98580.98240.98250.99060.9941
AQI 1.00341.03721.08131.12111.12161.54611.45321.45092.02211.4357
SGI 0.90580.91570.91220.91530.88230.87030.88510.90480.940.9844
DEPI 1.0431.0631.03970.98530.97180.95730.98981.0191.06651.073
SGAI 1.02251.01891.03351.03061.04921.04691.03731.03171.02481.0287
LVGI 0.99740.91660.981.03261.03871.00981.00420.89131.46961.4735
TATA -0.0856-0.0813-0.0803-0.0841-0.0802-0.0667-0.0657-0.0547-0.0539-0.061
M-score -2.88-2.92-2.91-2.95-3.02-2.71-2.74-2.60-2.45-2.77
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