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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 2196.41. The lowest was -3.70. And the median was -2.86.
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|
|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
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)|
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)|
|=||(4072.08778632 / 35685.3380659)||/||(3905.35474699 / 31586.2123633)|
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 - (17023.6359278 + 10254.2705805) / 36614.3143933)||/||(1 - (20411.1772136 + 11615.8330828) / 38842.8281128)|
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))|
|=||(2544.70063293 / (2544.70063293 + 11615.8330828))||/||(2274.62570339 / (2274.62570339 + 10254.2705805))|
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)|
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)|
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|
|=||(1812.99850274 - -57.6017190769||-||4275.3260512)||/||36614.3143933|
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.
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