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Crane Co (NYSE:CR)
Beneish M-Score
-2.54 (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.

Crane Co has a M-score of -2.54 suggests that the company is not a manipulator.

CR' s 10-Year Beneish M-Score Range
Min: -3.41   Max: -1.94
Current: -2.54

-3.41
-1.94

During the past 13 years, the highest Beneish M-Score of Crane Co was -1.94. The lowest was -3.41. And the median was -2.55.


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 Crane 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 * 1.0237+0.528 * 0.9876+0.404 * 1.1862+0.892 * 1.1306+0.115 * 0.8301
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0219+4.679 * -0.0217-0.327 * 1.4288
=-2.54

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $443 Mil.
Revenue was 727.413 + 750.096 + 716.83 + 681.449 = $2,876 Mil.
Gross Profit was 251.122 + 262.065 + 254.096 + 226.851 = $994 Mil.
Total Current Assets was $1,226 Mil.
Total Assets was $3,554 Mil.
Property, Plant and Equipment(Net PPE) was $295 Mil.
Depreciation, Depletion and Amortization(DDA) was $75 Mil.
Selling, General & Admin. Expense(SGA) was $605 Mil.
Total Current Liabilities was $658 Mil.
Long-Term Debt was $749 Mil.
Net Income was 28.079 + 59.697 + 48.684 + 49.706 = $186 Mil.
Non Operating Income was 0.342 + -1.514 + -0.204 + 2.903 = $2 Mil.
Cash Flow from Operations was 68.16 + 64.184 + -18.91 + 148.433 = $262 Mil.
Accounts Receivable was $382 Mil.
Revenue was 637.515 + 648.746 + 627.571 + 629.788 = $2,544 Mil.
Gross Profit was 216.198 + 222.721 + 217.752 + 211.704 = $868 Mil.
Total Current Assets was $1,220 Mil.
Total Assets was $2,858 Mil.
Property, Plant and Equipment(Net PPE) was $260 Mil.
Depreciation, Depletion and Amortization(DDA) was $52 Mil.
Selling, General & Admin. Expense(SGA) was $524 Mil.
Total Current Liabilities was $593 Mil.
Long-Term Debt was $199 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)
=(442.535 / 2875.788) / (382.348 / 2543.62)
=0.15388304 / 0.15031648
=1.0237

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)
=(262.065 / 2543.62) / (251.122 / 2875.788)
=0.34139337 / 0.34569099
=0.9876

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 - (1226.084 + 294.762) / 3554.105) / (1 - (1220.198 + 259.551) / 2858.145)
=0.57208749 / 0.48226944
=1.1862

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
=2875.788 / 2543.62
=1.1306

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))
=(52.3 / (52.3 + 259.551)) / (74.632 / (74.632 + 294.762))
=0.1677083 / 0.20203902
=0.8301

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)
=(605.242 / 2875.788) / (523.881 / 2543.62)
=0.21046127 / 0.20595883
=1.0219

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)
=((749.202 + 657.91) / 3554.105) / ((199.22 + 592.728) / 2858.145)
=0.39591177 / 0.27708461
=1.4288

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
=(186.166 - 1.527 - 261.867) / 3554.105
=-0.0217

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.

Crane Co has a M-score of -2.54 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.

Crane Co Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.07320.86171.04150.90090.97391.0021.05851.02610.92531.3044
GMI 1.11010.93580.96211.87390.52770.98530.98960.99181.00540.9899
AQI 1.13760.94641.03251.03620.97850.9661.04291.01140.92851.1861
SGI 1.15551.09041.09491.16050.99430.84341.00981.12741.03151.0063
DEPI 0.93340.93071.10450.90381.06330.96930.96460.96891.0311.1544
SGAI 0.97180.9711.0291.03331.06730.99630.96461.00250.92060.9853
LVGI 0.84660.96861.09141.80661.00430.49811.03930.98870.96181.2638
TATA 0.036-0.0226-0.0104-0.106-0.0209-0.02070.0071-0.0444-0.0058-0.0064
M-score -1.94-2.68-2.44-2.73-2.87-2.57-2.38-2.55-2.54-2.22

Crane Co Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 1.01911.02010.92930.9150.91820.95661.30441.17161.12891.0237
GMI 1.01561.01581.00540.98610.9770.97970.98990.99240.99240.9876
AQI 1.00891.00810.92850.92610.93510.94331.18611.18741.18081.1862
SGI 1.08041.04211.02711.0060.9930.99011.00631.04821.09161.1306
DEPI 0.97440.99521.0311.01971.07211.06271.15441.00810.92610.8301
SGAI 0.98840.990.92090.93250.93990.94070.98541.00651.01681.0219
LVGI 0.96660.93410.96180.96750.93430.86481.26381.33731.32841.4288
TATA -0.0377-0.0406-0.0058-0.0117-0.0048-0.0107-0.0064-0.0093-0.0164-0.0217
M-score -2.55-2.58-2.54-2.62-2.58-2.55-2.22-2.36-2.41-2.54
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