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Crane Co (NYSE:CR)
Beneish M-Score
-2.68 (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 -2.68 suggests that the company is not a manipulator.

CR' s 10-Year Beneish M-Score Range
Min: -3.22   Max: -1.94
Current: -2.68

-3.22
-1.94

During the past 13 years, the highest Beneish M-Score of Crane Co was -1.94. The lowest was -3.22. And the median was -2.66.


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 * 0.8333+0.528 * 0.9782+0.404 * 0.9624+0.892 * 1.127+0.115 * 0.7361
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0102+4.679 * -0.0214-0.327 * 1.0114
=-2.68

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $411 Mil.
Revenue was 730.658 + 727.413 + 750.096 + 716.83 = $2,925 Mil.
Gross Profit was 250.693 + 251.122 + 262.065 + 254.096 = $1,018 Mil.
Total Current Assets was $1,195 Mil.
Total Assets was $3,448 Mil.
Property, Plant and Equipment(Net PPE) was $290 Mil.
Depreciation, Depletion and Amortization(DDA) was $76 Mil.
Selling, General & Admin. Expense(SGA) was $610 Mil.
Total Current Liabilities was $640 Mil.
Long-Term Debt was $749 Mil.
Net Income was 56.212 + 28.079 + 59.697 + 48.684 = $193 Mil.
Non Operating Income was 3.751 + 0.342 + -1.514 + -0.204 = $2 Mil.
Cash Flow from Operations was 150.518 + 68.16 + 64.184 + -18.91 = $264 Mil.
Accounts Receivable was $438 Mil.
Revenue was 681.449 + 637.515 + 648.746 + 627.571 = $2,595 Mil.
Gross Profit was 226.851 + 216.198 + 222.721 + 217.752 = $884 Mil.
Total Current Assets was $1,149 Mil.
Total Assets was $3,560 Mil.
Property, Plant and Equipment(Net PPE) was $305 Mil.
Depreciation, Depletion and Amortization(DDA) was $55 Mil.
Selling, General & Admin. Expense(SGA) was $536 Mil.
Total Current Liabilities was $669 Mil.
Long-Term Debt was $749 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)
=(410.931 / 2924.997) / (437.541 / 2595.281)
=0.14048937 / 0.16859099
=0.8333

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)
=(251.122 / 2595.281) / (250.693 / 2924.997)
=0.34043404 / 0.34802634
=0.9782

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 - (1195.018 + 290.264) / 3447.928) / (1 - (1149.092 + 305.055) / 3559.607)
=0.56922476 / 0.59148664
=0.9624

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
=2924.997 / 2595.281
=1.127

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))
=(54.837 / (54.837 + 305.055)) / (75.766 / (75.766 + 290.264))
=0.15237071 / 0.20699396
=0.7361

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)
=(609.825 / 2924.997) / (535.646 / 2595.281)
=0.20848739 / 0.20639229
=1.0102

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)
=((749.213 + 640.024) / 3447.928) / ((749.17 + 668.902) / 3559.607)
=0.40291938 / 0.39837881
=1.0114

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
=(192.672 - 2.375 - 263.952) / 3447.928
=-0.0214

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 -2.68 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.86171.04150.90090.97391.0021.05851.00770.94211.30440.8333
GMI 0.93580.96211.00670.98240.98530.98960.99151.00560.98990.9727
AQI 0.94641.031.03870.97850.9661.04291.01140.92851.18610.9624
SGI 1.09041.09491.16050.99430.84341.00981.14791.0131.00631.127
DEPI 0.93071.10450.90381.06330.96930.96460.96891.0311.15440.7361
SGAI 0.9711.0291.03331.06730.99630.96461.00180.92120.98531.0352
LVGI 0.96861.08620.88252.06590.9130.5670.98870.96181.26381.0114
TATA -0.0226-0.01040.0296-0.021-0.02070.0071-0.0444-0.0058-0.0064-0.0214
M-score -2.68-2.43-2.25-2.98-2.71-2.23-2.55-2.55-2.22-2.69

Crane Co Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 1.020.93770.93190.93120.96561.31061.17161.12891.02370.8333
GMI 1.01561.00530.98680.97780.98010.99020.99240.99240.98760.9782
AQI 1.00810.92850.92610.93510.94331.18611.18741.18081.18620.9624
SGI 1.04221.01790.98780.97910.98091.00151.04821.09161.13061.127
DEPI 0.99521.0311.01971.07211.06271.15441.00810.92610.83010.7361
SGAI 0.9910.92220.9320.93930.93990.98431.00651.01681.02191.0102
LVGI 0.93410.96180.96750.93430.86481.26381.33731.32841.42881.0114
TATA -0.0406-0.0058-0.0117-0.0048-0.0107-0.0064-0.0093-0.0164-0.0217-0.0214
M-score -2.58-2.55-2.62-2.58-2.55-2.22-2.36-2.41-2.54-2.68
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