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Clorox Co (NYSE:CLX)
Beneish M-Score
-2.60 (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 -2.60 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: -2.6

-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 * 0.9787+0.528 * 0.9542+0.404 * 1.1018+0.892 * 1.0239+0.115 * 0.9885
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0451+4.679 * -0.0283-0.327 * 0.9977
=-2.60

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $474 Mil.
Revenue was 1345 + 1390 + 1557 + 1401 = $5,693 Mil.
Gross Profit was 600 + 625 + 710 + 605 = $2,540 Mil.
Total Current Assets was $1,490 Mil.
Total Assets was $4,175 Mil.
Property, Plant and Equipment(Net PPE) was $878 Mil.
Depreciation, Depletion and Amortization(DDA) was $166 Mil.
Selling, General & Admin. Expense(SGA) was $1,328 Mil.
Total Current Liabilities was $1,358 Mil.
Long-Term Debt was $1,796 Mil.
Net Income was 149 + 172 + 191 + 174 = $686 Mil.
Non Operating Income was 3 + 1 + 17 + 1 = $22 Mil.
Cash Flow from Operations was 38 + 147 + 379 + 218 = $782 Mil.
Accounts Receivable was $473 Mil.
Revenue was 1345 + 1352 + 1497 + 1366 = $5,560 Mil.
Gross Profit was 572 + 578 + 642 + 575 = $2,367 Mil.
Total Current Assets was $1,905 Mil.
Total Assets was $4,674 Mil.
Property, Plant and Equipment(Net PPE) was $933 Mil.
Depreciation, Depletion and Amortization(DDA) was $174 Mil.
Selling, General & Admin. Expense(SGA) was $1,241 Mil.
Total Current Liabilities was $1,744 Mil.
Long-Term Debt was $1,795 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)
=(474 / 5693) / (473 / 5560)
=0.08326014 / 0.08507194
=0.9787

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)
=(625 / 5560) / (600 / 5693)
=0.42571942 / 0.44616195
=0.9542

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 - (1490 + 878) / 4175) / (1 - (1905 + 933) / 4674)
=0.43281437 / 0.3928113
=1.1018

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 / 5560
=1.0239

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))
=(174 / (174 + 933)) / (166 / (166 + 878))
=0.15718157 / 0.15900383
=0.9885

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)
=(1328 / 5693) / (1241 / 5560)
=0.23326893 / 0.22320144
=1.0451

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 + 1358) / 4175) / ((1795 + 1744) / 4674)
=0.7554491 / 0.75716731
=0.9977

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
=(686 - 22 - 782) / 4175
=-0.0283

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 -2.60 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 1.00011.01321.00910.93111.1570.97281.04960.99510.94460.9268
GMI 1.02380.97781.04590.95820.97151.01971.03120.97511.01140.9802
AQI 1.05070.98961.20741.00580.86270.9630.98340.99531.02110.9852
SGI 1.05831.04371.08791.03360.96040.99941.04531.01190.99661.0256
DEPI 0.98160.95950.93421.06981.03271.11581.00960.94330.97720.9865
SGAI 1.03590.98910.96860.99881.05331.00790.98990.99670.97471.0272
LVGI 0.89250.94231.15350.960.92761.01160.99480.9190.99071.0125
TATA -0.0221-0.0586-0.0565-0.0382-0.042-0.0408-0.0207-0.0494-0.0526-0.0747
M-score -2.47-2.70-2.60-2.69-2.62-2.69-2.48-2.70-2.76-2.90

Clorox Co Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 0.99920.99141.0060.94460.90170.94120.93750.92681.00640.9787
GMI 0.97780.9830.98151.01141.01891.01811.01190.98020.96430.9542
AQI 1.08631.02441.02861.02111.02420.90910.99720.98520.9851.1018
SGI 1.00670.9850.97450.99660.99731.00711.02211.02561.03081.0239
DEPI 0.91530.95660.96910.97720.95840.96790.96770.98650.9920.9885
SGAI 0.99250.99660.99060.97470.96610.95820.99161.02721.03891.0451
LVGI 0.94670.97071.0210.99070.97090.99150.9331.01251.01930.9977
TATA -0.0414-0.0219-0.0354-0.0526-0.0805-0.0693-0.0672-0.0747-0.0335-0.0283
M-score -2.64-2.60-2.67-2.76-2.92-2.87-2.81-2.90-2.64-2.60
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