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Clorox Co (NYSE:CLX)
Beneish M-Score
-2.74 (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 -2.74 suggests that the company is not a manipulator.

CLX' s 10-Year Beneish M-Score Range
Min: -3.4   Max: -2.18
Current: -2.74

-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 * 0.9468+0.528 * 1.0162+0.404 * 1.0211+0.892 * 0.9943+0.115 * 0.9724
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9765+4.679 * -0.0479-0.327 * 0.9907
=-2.74

* 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 $546 Mil.
Revenue was 1511 + 1386 + 1330 + 1364 = $5,591 Mil.
Gross Profit was 639 + 579 + 557 + 585 = $2,360 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 $180 Mil.
Selling, General & Admin. Expense(SGA) was $1,269 Mil.
Total Current Liabilities was $1,638 Mil.
Long-Term Debt was $1,595 Mil.
Net Income was 170 + 137 + 115 + 136 = $558 Mil.
Non Operating Income was 3 + -10 + 4 + -2 = $-5 Mil.
Cash Flow from Operations was 337 + 220 + 32 + 178 = $767 Mil.
Accounts Receivable was $580 Mil.
Revenue was 1547 + 1413 + 1325 + 1338 = $5,623 Mil.
Gross Profit was 680 + 595 + 563 + 574 = $2,412 Mil.
Total Current Assets was $1,420 Mil.
Total Assets was $4,311 Mil.
Property, Plant and Equipment(Net PPE) was $1,021 Mil.
Depreciation, Depletion and Amortization(DDA) was $182 Mil.
Selling, General & Admin. Expense(SGA) was $1,307 Mil.
Total Current Liabilities was $1,134 Mil.
Long-Term Debt was $2,170 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)
=(546 / 5591) / (580 / 5623)
=0.09765695 / 0.10314779
=0.9468

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)
=(579 / 5623) / (639 / 5591)
=0.42895252 / 0.42210696
=1.0162

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 - (1395 + 977) / 4258) / (1 - (1420 + 1021) / 4311)
=0.44293095 / 0.43377407
=1.0211

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
=5591 / 5623
=0.9943

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))
=(182 / (182 + 1021)) / (180 / (180 + 977))
=0.15128845 / 0.15557476
=0.9724

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)
=(1269 / 5591) / (1307 / 5623)
=0.22697192 / 0.2324382
=0.9765

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)
=((1595 + 1638) / 4258) / ((2170 + 1134) / 4311)
=0.75927666 / 0.76641151
=0.9907

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
=(558 - -5 - 767) / 4258
=-0.0479

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 -2.74 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

Jun05Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14
DSRI 0.84751.00011.01321.00910.93111.1570.97281.32110.77790.9468
GMI 1.01871.02380.97781.04590.95820.97151.01971.03120.98231.0162
AQI 0.93141.05070.98961.20741.00580.86270.9630.98340.99531.0211
SGI 1.05431.05831.04371.08791.03360.96040.99941.04531.02830.9943
DEPI 0.98370.98160.95950.93421.06041.04191.11581.00960.93450.9724
SGAI 0.97111.03590.98910.96860.99881.05331.00790.98990.99290.9765
LVGI 2.11030.89250.94231.15350.960.92761.01160.99480.9190.9907
TATA 0.0852-0.0221-0.0586-0.0565-0.0382-0.042-0.0394-0.0186-0.0464-0.0479
M-score -2.55-2.47-2.70-2.60-2.69-2.62-2.69-2.22-2.87-2.74

Clorox Co Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 1.06861.32111.09770.99040.97160.77790.97960.96810.97870.9468
GMI 1.03091.03121.01071.00430.99540.98230.98830.99660.99721.0162
AQI 0.95570.98340.9030.95190.96410.99531.08631.02441.02861.0211
SGI 1.04461.04531.04381.05521.03851.02831.02691.00871.00180.9943
DEPI 1.02291.00961.04790.98410.9780.93450.90250.94310.95080.9724
SGAI 0.99550.98990.99110.99480.98030.99290.98820.99210.98590.9765
LVGI 1.01830.99480.98650.91050.9110.9190.94670.97071.0210.9907
TATA -0.0226-0.0186-0.0314-0.0475-0.0464-0.0464-0.0384-0.0189-0.0297-0.0479
M-score -2.49-2.22-2.52-2.65-2.68-2.87-2.62-2.58-2.64-2.74
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