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Clorox Co (NYSE:CLX)
Beneish M-Score
-2.71 (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 -2.71 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: -2.71

-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 -2.68.


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 * 0.9847+0.528 * 0.9456+0.404 * 0.982+0.892 * 1.0194+0.115 * 1.0119
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0371+4.679 * -0.0399-0.327 * 1.0147
=-2.71

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $530 Mil.
Revenue was 1426 + 1345 + 1390 + 1557 = $5,718 Mil.
Gross Profit was 646 + 600 + 625 + 710 = $2,581 Mil.
Total Current Assets was $1,590 Mil.
Total Assets was $4,284 Mil.
Property, Plant and Equipment(Net PPE) was $887 Mil.
Depreciation, Depletion and Amortization(DDA) was $165 Mil.
Selling, General & Admin. Expense(SGA) was $1,348 Mil.
Total Current Liabilities was $1,387 Mil.
Long-Term Debt was $1,796 Mil.
Net Income was 162 + 149 + 172 + 191 = $674 Mil.
Non Operating Income was -2 + 3 + 1 + 17 = $19 Mil.
Cash Flow from Operations was 262 + 38 + 147 + 379 = $826 Mil.
Accounts Receivable was $528 Mil.
Revenue was 1401 + 1345 + 1352 + 1511 = $5,609 Mil.
Gross Profit was 605 + 572 + 578 + 639 = $2,394 Mil.
Total Current Assets was $1,495 Mil.
Total Assets was $4,228 Mil.
Property, Plant and Equipment(Net PPE) was $917 Mil.
Depreciation, Depletion and Amortization(DDA) was $173 Mil.
Selling, General & Admin. Expense(SGA) was $1,275 Mil.
Total Current Liabilities was $1,300 Mil.
Long-Term Debt was $1,796 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)
=(530 / 5718) / (528 / 5609)
=0.09268975 / 0.09413443
=0.9847

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)
=(600 / 5609) / (646 / 5718)
=0.42681405 / 0.4513816
=0.9456

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 - (1590 + 887) / 4284) / (1 - (1495 + 917) / 4228)
=0.42180205 / 0.4295175
=0.982

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
=5718 / 5609
=1.0194

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))
=(173 / (173 + 917)) / (165 / (165 + 887))
=0.1587156 / 0.15684411
=1.0119

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)
=(1348 / 5718) / (1275 / 5609)
=0.23574676 / 0.22731325
=1.0371

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 + 1387) / 4284) / ((1796 + 1300) / 4228)
=0.7429972 / 0.73226112
=1.0147

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
=(674 - 19 - 826) / 4284
=-0.0399

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 -2.71 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 1.00011.01321.00910.93111.10241.0211.04960.97920.94680.9398
GMI 1.02380.97781.04590.95820.96171.03011.03120.98231.01620.9684
AQI 1.05070.98961.20741.00581.00910.82330.98340.99531.02110.9852
SGI 1.05831.04371.08791.03361.01540.94521.04531.02830.99431.0114
DEPI 1.01320.95950.93421.06041.04411.11351.00960.93450.97241.0006
SGAI 1.03590.98910.96860.99881.02621.03450.98990.99290.97651.0292
LVGI 0.89250.94231.15350.960.92671.01260.99480.9190.99071.0125
TATA -0.0221-0.0586-0.059-0.0374-0.0419-0.0404-0.0193-0.0485-0.0498-0.0747
M-score -2.47-2.70-2.61-2.69-2.56-2.75-2.47-2.69-2.75-2.91

Clorox Co Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 0.96810.97870.94680.91050.95810.96130.93981.01660.98470.9847
GMI 0.99660.99721.01621.0171.00990.99970.96840.95580.94880.9456
AQI 1.02441.02861.02111.02420.90910.99720.98520.9851.10180.982
SGI 1.00871.00180.99430.98760.98940.99681.01141.02041.01771.0194
DEPI 0.94310.95080.97240.96290.97230.98161.00061.00140.99811.0119
SGAI 0.99210.98590.97650.96920.96140.99541.02921.04021.04641.0371
LVGI 0.97071.0210.99070.97090.99150.9331.01251.01930.99771.0147
TATA -0.021-0.0318-0.0498-0.0776-0.0668-0.0672-0.0747-0.0335-0.0283-0.0399
M-score -2.59-2.65-2.75-2.91-2.87-2.81-2.91-2.65-2.60-2.71
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