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Canon Inc (NYSE:CAJ)
Beneish M-Score
-3.00 (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 -3.07 suggests that the company is not a manipulator.

CAJ' s 10-Year Beneish M-Score Range
Min: -3.65   Max: 2163.67
Current: -3

-3.65
2163.67

During the past 13 years, the highest Beneish M-Score of Canon Inc was 2163.67. The lowest was -3.65. And the median was -2.78.


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 * 1.0065+0.528 * 0.9618+0.404 * 1.0813+0.892 * 0.9122+0.115 * 0.8903
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0335+4.679 * -0.1099-0.327 * 0.98
=-3.07

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
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 $3,085 Mil.
Selling, General & Admin. Expense(SGA) was $11,288 Mil.
Total Current Liabilities was $7,656 Mil.
Long-Term Debt was $13 Mil.
Net Income was 542.225929177 + 792.138965285 + 465.213992574 + 621.032283008 = $2,421 Mil.
Non Operating Income was 61.6798401127 + 41.5822007801 + -48.3584131327 + 45.7954765127 = $101 Mil.
Cash Flow from Operations was 3710.00607862 + 0 + 1292.30017588 + 1588.20800309 = $6,591 Mil.
Accounts Receivable was $5,240 Mil.
Revenue was 9204.20320532 + 9943.74453643 + 8617.21008758 + 11354.3698011 = $39,120 Mil.
Gross Profit was 4506.92470517 + 4909.32277472 + 4072.1008758 + 5160.36328484 = $18,649 Mil.
Total Current Assets was $21,359 Mil.
Total Assets was $40,774 Mil.
Property, Plant and Equipment(Net PPE) was $12,798 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,941 Mil.
Selling, General & Admin. Expense(SGA) was $11,973 Mil.
Total Current Liabilities was $8,200 Mil.
Long-Term Debt was $14 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)
=(4811.17646895 / 35685.3380659) / (5240.32859591 / 39119.5276304)
=0.13482222 / 0.13395685
=1.0065

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)
=(4737.37273779 / 39119.5276304) / (4016.41320466 / 35685.3380659)
=0.47671106 / 0.4956355
=0.9618

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 - (20411.1772136 + 11615.8330828) / 38842.8281128) / (1 - (21358.7843967 + 12798.3570205) / 40773.7022478)
=0.17547172 / 0.1622752
=1.0813

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
=35685.3380659 / 39119.5276304
=0.9122

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))
=(2940.77581868 / (2940.77581868 + 12798.3570205)) / (3085.40647031 / (3085.40647031 + 11615.8330828))
=0.18684484 / 0.2098739
=0.8903

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)
=(11288.1109687 / 35685.3380659) / (11973.4328838 / 39119.5276304)
=0.3163235 / 0.30607304
=1.0335

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)
=((12.7064566486 + 7656.13814944) / 38842.8281128) / ((13.748614051 + 8200.37294628) / 40773.7022478)
=0.1974327 / 0.20145636
=0.98

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
=(2420.61117004 - 100.699104273 - 6590.5142576) / 38842.8281128
=-0.1099

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 -3.07 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.0771.06890.99820.96690.82061.19250.86720.99661.09930.9649
GMI 1.01831.01970.97750.98861.05921.06430.92470.98531.02960.9838
AQI 0.86130.9840.97021.14161.15541.05461.12350.91261.03831.0314
SGI 1.12090.95181.11621.12861.12180.79541.24671.0280.90820.8684
DEPI 1.05731.02580.9580.85680.99641.011.06481.03821.05870.9599
SGAI 0.71430.98080.99410.99591.04171.0821.0321.01421.00161.0459
LVGI 1.01250.96950.95351.07540.85560.85431.10351.00920.93760.9358
TATA -0.0627-0.0589-0.0502-0.0734-0.069-0.124-0.1253-0.0534-0.0436-0.0663
M-score -2.59-2.72-2.63-2.73-2.73-2.97-2.99-2.75-2.62-2.93

Canon Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 1.0290.98321.04570.94281.00981.0140.95381.10050.98751.0065
GMI 0.99911.00741.02881.02211.01571.00730.98430.97390.96180.9618
AQI 0.95281.02461.03831.04841.0461.03471.03141.00341.03721.0813
SGI 1.03190.96910.95480.92740.8780.88840.87860.90580.91570.9122
DEPI 1.06291.03831.01510.95920.91710.91310.95061.0431.32730.8903
SGAI 0.95080.98971.00321.041.0621.03681.04581.02251.01891.0335
LVGI 1.00650.89530.93760.8530.94840.91320.93580.99740.91660.98
TATA -0.0571-0.0443-0.0451-0.0552-0.0519-0.0641-0.0688-0.0856-0.0417-0.1099
M-score -2.70-2.68-2.64-2.79-2.80-2.84-2.94-2.88-2.71-3.07
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