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Clorox Co (NYSE:CLX)
Beneish M-Score
-2.90 (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 -2.90 suggests that the company is not a manipulator.

CLX' s 10-Year Beneish M-Score Range
Min: -3.4   Max: -2.18
Current: -2.9

-3.4
-2.18

During the past 13 years, the highest Beneish M-Score of Clorox Co was -2.18. The lowest was -3.40. 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 * 0.9268+0.528 * 0.9802+0.404 * 0.9852+0.892 * 1.0256+0.115 * 0.9865
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0272+4.679 * -0.0747-0.327 * 1.0125
=-2.90

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $519 Mil.
Revenue was 1557 + 1401 + 1345 + 1352 = $5,655 Mil.
Gross Profit was 710 + 605 + 572 + 578 = $2,465 Mil.
Total Current Assets was $1,429 Mil.
Total Assets was $4,164 Mil.
Property, Plant and Equipment(Net PPE) was $918 Mil.
Depreciation, Depletion and Amortization(DDA) was $169 Mil.
Selling, General & Admin. Expense(SGA) was $1,321 Mil.
Total Current Liabilities was $1,405 Mil.
Long-Term Debt was $1,796 Mil.
Net Income was 191 + 174 + 125 + 90 = $580 Mil.
Non Operating Income was 17 + 1 + 2 + -3 = $17 Mil.
Cash Flow from Operations was 379 + 218 + 34 + 243 = $874 Mil.
Accounts Receivable was $546 Mil.
Revenue was 1497 + 1366 + 1308 + 1343 = $5,514 Mil.
Gross Profit was 642 + 575 + 555 + 584 = $2,356 Mil.
Total Current Assets was $1,395 Mil.
Total Assets was $4,258 Mil.
Property, Plant and Equipment(Net PPE) was $977 Mil.
Depreciation, Depletion and Amortization(DDA) was $177 Mil.
Selling, General & Admin. Expense(SGA) was $1,254 Mil.
Total Current Liabilities was $1,638 Mil.
Long-Term Debt was $1,595 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)
=(519 / 5655) / (546 / 5514)
=0.09177719 / 0.09902067
=0.9268

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)
=(605 / 5514) / (710 / 5655)
=0.42727602 / 0.43589744
=0.9802

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 - (1429 + 918) / 4164) / (1 - (1395 + 977) / 4258)
=0.43635927 / 0.44293095
=0.9852

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
=5655 / 5514
=1.0256

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 + 977)) / (169 / (169 + 918))
=0.15337955 / 0.15547378
=0.9865

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)
=(1321 / 5655) / (1254 / 5514)
=0.23359859 / 0.22742111
=1.0272

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 + 1405) / 4164) / ((1595 + 1638) / 4258)
=0.76873199 / 0.75927666
=1.0125

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
=(580 - 17 - 874) / 4164
=-0.0747

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 -2.90 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 1.00011.01321.00910.93111.09421.02851.04960.97920.94680.9398
GMI 1.02380.97781.04590.95820.96171.03011.03120.98231.01620.9684
AQI 1.05070.98961.20741.00580.86270.9630.98340.99531.02110.9852
SGI 1.05831.04371.08791.03361.01540.94521.04531.02830.99431.0114
DEPI 0.98160.95950.93421.06041.03241.1261.00960.93450.97241.0006
SGAI 1.03590.98910.96860.99881.02621.03450.98990.99290.97651.0292
LVGI 0.89250.94231.15350.960.92761.01160.99480.9190.99071.0125
TATA -0.0221-0.0586-0.0565-0.0382-0.042-0.0404-0.0193-0.0485-0.0479-0.0747
M-score -2.47-2.70-2.60-2.69-2.63-2.69-2.47-2.69-2.74-2.91

Clorox Co Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 0.97160.97920.98330.97550.98980.960.91630.95660.95290.9268
GMI 0.99540.98230.98510.99030.98891.00391.01141.01061.00430.9802
AQI 0.96410.99531.08631.02441.02861.02111.02420.90910.99720.9852
SGI 1.03851.02831.02311.00110.99060.98060.98130.99091.00561.0256
DEPI 0.9780.93450.90670.94760.95980.98640.96750.97710.9770.9865
SGAI 0.98030.99290.98880.99280.9870.97840.96980.96190.99521.0272
LVGI 0.9110.9190.94670.97071.0210.99070.97090.99150.9331.0125
TATA -0.0484-0.0485-0.0405-0.021-0.0345-0.0526-0.0805-0.0693-0.0672-0.0747
M-score -2.69-2.69-2.63-2.59-2.66-2.76-2.92-2.88-2.81-2.90
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