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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 -2.65 suggests that the company is not a manipulator.

CAJ' s 10-Year Beneish M-Score Range
Min: -3.62   Max: 2163.67
Current: -2.65

-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 -2.76.


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 * 1.0108+0.528 * 0.9623+0.404 * 1.0372+0.892 * 0.9494+0.115 * 1.3182
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0185+4.679 * -0.0417-0.327 * 0.9166
=-2.65

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $5,246 Mil.
Revenue was 9109.45547474 + 8474.80919011 + 9971.93550563 + 9339.76679963 = $36,896 Mil.
Gross Profit was 4752.40809908 + 4211.30609616 + 4703.28928981 + 4573.30469469 = $18,240 Mil.
Total Current Assets was $21,398 Mil.
Total Assets was $40,238 Mil.
Property, Plant and Equipment(Net PPE) was $12,226 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,023 Mil.
Selling, General & Admin. Expense(SGA) was $11,492 Mil.
Total Current Liabilities was $7,971 Mil.
Long-Term Debt was $11 Mil.
Net Income was 794.653037154 + 464.678209608 + 619.230732163 + 601.636493812 = $2,480 Mil.
Non Operating Income was 41.7141733831 + -48.302719163 + 45.6626285406 + -40.3600286386 = $-1 Mil.
Cash Flow from Operations was 0 + 1290.81184485 + 1583.60077486 + 1282.98046436 = $4,157 Mil.
Accounts Receivable was $5,467 Mil.
Revenue was 9700.5207027 + 8353.82270505 + 10682.858362 + 10124.2706896 = $38,861 Mil.
Gross Profit was 4789.24081747 + 3947.6359991 + 4855.1730333 + 4894.82743346 = $18,487 Mil.
Total Current Assets was $21,814 Mil.
Total Assets was $41,230 Mil.
Property, Plant and Equipment(Net PPE) was $12,883 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,966 Mil.
Selling, General & Admin. Expense(SGA) was $11,884 Mil.
Total Current Liabilities was $8,906 Mil.
Long-Term Debt was $16 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)
=(5246.41242383 / 36895.9669701) / (5466.75629308 / 38861.4724593)
=0.14219474 / 0.14067291
=1.0108

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)
=(4211.30609616 / 38861.4724593) / (4752.40809908 / 36895.9669701)
=0.47571222 / 0.49437133
=0.9623

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 - (21398.2701003 + 12226.0762729) / 40237.6646353) / (1 - (21813.9616546 + 12882.7064501) / 41230.0823693)
=0.16435641 / 0.15846231
=1.0372

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
=36895.9669701 / 38861.4724593
=0.9494

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))
=(2966.18659986 / (2966.18659986 + 12882.7064501)) / (2022.96396246 / (2022.96396246 + 12226.0762729))
=0.18715418 / 0.14197195
=1.3182

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)
=(11491.8508866 / 36895.9669701) / (11883.9468342 / 38861.4724593)
=0.31146632 / 0.30580279
=1.0185

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)
=((11.4409278553 + 7970.67033615) / 40237.6646353) / ((16.4638367462 + 8906.44407212) / 41230.0823693)
=0.19837412 / 0.21641742
=0.9166

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
=(2480.19847274 - -1.28594587789 - 4157.39308407) / 40237.6646353
=-0.0417

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 -2.65 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 1.01931.06890.99820.96690.82061.19250.86720.99661.09930.9901
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 1.11070.9721.05981.20851.08940.77541.27361.03030.84530.9204
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 -2.65-2.70-2.68-2.66-2.75-2.99-2.97-2.75-2.67-2.86

Canon Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 1.05650.99260.95350.98940.92711.0211.06391.03411.08311.0108
GMI 0.98950.99931.00751.02821.02131.01511.00640.98490.97470.9623
AQI 0.93260.95281.02461.03831.04841.0461.03471.03141.00341.0372
SGI 0.99971.03020.9720.93930.8960.84310.86040.88120.92440.9494
DEPI 1.03611.05591.02510.97090.95110.92540.95730.99381.05011.3182
SGAI 0.98310.9510.98941.0031.03991.06231.03741.04571.02221.0185
LVGI 1.05681.00650.89530.93760.8530.94840.91320.93580.99740.9166
TATA -0.0525-0.0572-0.045-0.047-0.0557-0.0513-0.0615-0.0684-0.0852-0.0417
M-score -2.72-2.73-2.71-2.72-2.83-2.82-2.80-2.86-2.88-2.65
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