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Clorox Co (NYSE:CLX)
Beneish M-Score
-2.51 (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 -2.51 suggests that the company is not a manipulator.

CLX' s Beneish M-Score Range Over the Past 10 Years
Min: -3.4   Max: -2.18
Current: -2.51

-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 * 1.0762+0.528 * 0.9666+0.404 * 1.0789+0.892 * 1.0187+0.115 * 1.0092
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0351+4.679 * -0.0292-0.327 * 0.966
=-2.51

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $569 Mil.
Revenue was 1600 + 1426 + 1345 + 1390 = $5,761 Mil.
Gross Profit was 727 + 646 + 600 + 625 = $2,598 Mil.
Total Current Assets was $1,485 Mil.
Total Assets was $4,518 Mil.
Property, Plant and Equipment(Net PPE) was $906 Mil.
Depreciation, Depletion and Amortization(DDA) was $165 Mil.
Selling, General & Admin. Expense(SGA) was $1,393 Mil.
Total Current Liabilities was $1,558 Mil.
Long-Term Debt was $1,797 Mil.
Net Income was 165 + 162 + 149 + 172 = $648 Mil.
Non Operating Income was 0 + -2 + 3 + 1 = $2 Mil.
Cash Flow from Operations was 331 + 262 + 38 + 147 = $778 Mil.
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.



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)
=(569 / 5761) / (519 / 5655)
=0.09876758 / 0.09177719
=1.0762

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)
=(2465 / 5655) / (2598 / 5761)
=0.43589744 / 0.45096337
=0.9666

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 - (1485 + 906) / 4518) / (1 - (1429 + 918) / 4164)
=0.47078353 / 0.43635927
=1.0789

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
=5761 / 5655
=1.0187

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))
=(169 / (169 + 918)) / (165 / (165 + 906))
=0.15547378 / 0.15406162
=1.0092

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)
=(1393 / 5761) / (1321 / 5655)
=0.2417983 / 0.23359859
=1.0351

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)
=((1797 + 1558) / 4518) / ((1796 + 1405) / 4164)
=0.74258521 / 0.76873199
=0.966

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
=(648 - 2 - 778) / 4518
=-0.0292

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 -2.51 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

Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14Jun15Jun16
DSRI 1.01321.00910.93111.1570.97281.04960.99510.94460.92681.0762
GMI 0.97781.04590.95820.97151.01971.03120.97511.01140.98020.9666
AQI 0.98961.20741.00580.86270.9630.98340.99531.02110.98521.0789
SGI 1.04371.08791.03360.96040.99941.04531.01190.99661.02561.0187
DEPI 0.95950.93421.06981.03271.11581.00960.94330.97720.98651.0092
SGAI 0.98910.96860.99881.05331.00790.98990.99670.97471.02721.0351
LVGI 0.94231.15350.960.92761.01160.99480.9190.99071.01250.966
TATA -0.0586-0.0565-0.0382-0.042-0.0408-0.0207-0.0494-0.0507-0.0728-0.0292
M-score -2.70-2.60-2.69-2.62-2.69-2.48-2.70-2.75-2.89-2.51

Clorox Co Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 1.0060.94460.90170.94120.93750.92681.00640.97870.98221.0762
GMI 0.98151.01141.01891.01811.01190.98020.96430.95420.94910.9666
AQI 1.02861.02111.02420.90910.99720.98520.9851.10180.9821.0789
SGI 0.97450.99660.99731.00711.02211.02561.03081.02391.0221.0187
DEPI 0.96910.97720.95840.96790.96770.98650.9920.98851.0071.0092
SGAI 0.99060.97470.96610.95820.99161.02721.03891.04511.03611.0351
LVGI 1.0210.99070.97090.99150.9331.01251.01930.99771.01470.966
TATA -0.0354-0.0507-0.0786-0.0676-0.0653-0.0728-0.0315-0.0263-0.038-0.0292
M-score -2.67-2.75-2.91-2.86-2.80-2.89-2.63-2.59-2.70-2.51
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