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Clorox Co (NYSE:CLX)
Beneish M-Score
-2.64 (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.

Clorox Co has a M-score of -2.64 suggests that the company is not a manipulator.

CLX' s Beneish M-Score Range Over the Past 10 Years
Min: -3.7   Max: -2.15
Current: -2.64

-3.7
-2.15

During the past 13 years, the highest Beneish M-Score of Clorox Co was -2.15. The lowest was -3.70. And the median was -2.69.


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 Clorox Co 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 * 1.0064+0.528 * 0.9643+0.404 * 0.985+0.892 * 1.0308+0.115 * 0.992
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0389+4.679 * -0.0335-0.327 * 1.0193
=-2.64

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $472 Mil.
Revenue was 1390 + 1557 + 1401 + 1345 = $5,693 Mil.
Gross Profit was 625 + 710 + 605 + 572 = $2,512 Mil.
Total Current Assets was $1,410 Mil.
Total Assets was $4,095 Mil.
Property, Plant and Equipment(Net PPE) was $885 Mil.
Depreciation, Depletion and Amortization(DDA) was $167 Mil.
Selling, General & Admin. Expense(SGA) was $1,329 Mil.
Total Current Liabilities was $1,351 Mil.
Long-Term Debt was $1,796 Mil.
Net Income was 172 + 191 + 174 + 125 = $662 Mil.
Non Operating Income was 1 + 17 + 1 + 2 = $21 Mil.
Cash Flow from Operations was 147 + 379 + 218 + 34 = $778 Mil.
Accounts Receivable was $455 Mil.
Revenue was 1352 + 1497 + 1366 + 1308 = $5,523 Mil.
Gross Profit was 578 + 642 + 575 + 555 = $2,350 Mil.
Total Current Assets was $1,351 Mil.
Total Assets was $4,150 Mil.
Property, Plant and Equipment(Net PPE) was $947 Mil.
Depreciation, Depletion and Amortization(DDA) was $177 Mil.
Selling, General & Admin. Expense(SGA) was $1,241 Mil.
Total Current Liabilities was $1,533 Mil.
Long-Term Debt was $1,596 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)
=(472 / 5693) / (455 / 5523)
=0.08290884 / 0.08238276
=1.0064

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)
=(710 / 5523) / (625 / 5693)
=0.42549339 / 0.44124363
=0.9643

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 - (1410 + 885) / 4095) / (1 - (1351 + 947) / 4150)
=0.43956044 / 0.44626506
=0.985

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
=5693 / 5523
=1.0308

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))
=(177 / (177 + 947)) / (167 / (167 + 885))
=0.15747331 / 0.15874525
=0.992

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)
=(1329 / 5693) / (1241 / 5523)
=0.23344458 / 0.22469672
=1.0389

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)
=((1796 + 1351) / 4095) / ((1596 + 1533) / 4150)
=0.76849817 / 0.7539759
=1.0193

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
=(662 - 21 - 778) / 4095
=-0.0335

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.

Clorox Co has a M-score of -2.64 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.

Clorox Co Annual Data

Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14Jun15
DSRI 1.00011.01321.00910.93111.1570.97281.04960.97920.960.9268
GMI 1.02380.97781.04590.95820.97151.01971.03120.98231.00390.9802
AQI 1.05070.98961.20741.00580.86270.9630.98340.99531.02110.9852
SGI 1.05831.04371.08791.03360.96040.99941.04531.02830.98061.0256
DEPI 0.98160.95950.93421.06041.04191.11581.00960.93450.98640.9865
SGAI 1.03590.98910.96860.99881.05331.00790.98990.99290.97841.0272
LVGI 0.89250.94231.15350.960.92761.01160.99480.9190.99071.0125
TATA -0.0221-0.0586-0.0565-0.0382-0.042-0.0394-0.0207-0.0485-0.0526-0.0747
M-score -2.47-2.70-2.60-2.69-2.62-2.69-2.48-2.69-2.76-2.90

Clorox Co Quarterly Data

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
DSRI 0.97920.98330.97550.98980.960.91630.95660.95290.92681.0064
GMI 0.98230.98510.99030.98891.00391.01141.01061.00430.98020.9643
AQI 0.99531.08631.02441.02861.02111.02420.90910.99720.98520.985
SGI 1.02831.02311.00110.99060.98060.98130.99091.00561.02561.0308
DEPI 0.93450.90670.94760.95980.98640.96750.97710.9770.98650.992
SGAI 0.99290.98880.99280.9870.97840.96980.96190.99521.02721.0389
LVGI 0.9190.94670.97071.0210.99070.97090.99150.9331.01251.0193
TATA -0.0485-0.0405-0.021-0.0345-0.0526-0.0805-0.0693-0.0672-0.0747-0.0335
M-score -2.69-2.63-2.59-2.66-2.76-2.92-2.88-2.81-2.90-2.64
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