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Crane Company (NYSE:CR)
Beneish M-Score
-2.27 (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 Company has a M-score of -2.27 suggests that the company is not a manipulator.

CR' s 10-Year Beneish M-Score Range
Min: -3.22   Max: -1.94
Current: -2.27

-3.22
-1.94

During the past 13 years, the highest Beneish M-Score of Crane Company was -1.94. The lowest was -3.22. And the median was -2.59.


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 Company 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 * 1.2463+0.528 * 0.9899+0.404 * 1.1861+0.892 * 1.0063+0.115 * 1.1544
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9854+4.679 * -0.0064-0.327 * 1.2638
=-2.27

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $460 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.
Net Income was 49.706 + 57.131 + 54.874 + 57.791 = $220 Mil.
Non Operating Income was 2.903 + -0.456 + 0.406 + -0.12 = $3 Mil.
Cash Flow from Operations was 148.433 + 80.454 + 30.948 + -20.403 = $239 Mil.
Accounts Receivable was $367 Mil.
Revenue was 629.788 + 645.981 + 657.686 + 645.613 = $2,579 Mil.
Gross Profit was 211.704 + 219.833 + 221.591 + 215.988 = $869 Mil.
Total Current Assets was $1,181 Mil.
Total Assets was $2,890 Mil.
Property, Plant and Equipment(Net PPE) was $268 Mil.
Depreciation, Depletion and Amortization(DDA) was $57 Mil.
Selling, General & Admin. Expense(SGA) was $540 Mil.
Total Current Liabilities was $512 Mil.
Long-Term Debt was $399 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)
=(460.324 / 2595.281) / (367.052 / 2579.068)
=0.17736962 / 0.14231963
=1.2463

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)
=(216.198 / 2579.068) / (226.851 / 2595.281)
=0.3369884 / 0.34043404
=0.9899

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 - (1149.092 + 305.055) / 3559.607) / (1 - (1180.521 + 268.283) / 2889.878)
=0.59148664 / 0.49866257
=1.1861

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
=2595.281 / 2579.068
=1.0063

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))
=(57.263 / (57.263 + 268.283)) / (54.837 / (54.837 + 305.055))
=0.17589834 / 0.15237071
=1.1544

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)
=(535.646 / 2595.281) / (540.212 / 2579.068)
=0.20639229 / 0.20946016
=0.9854

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)
=((749.17 + 668.902) / 3559.607) / ((399.092 + 511.888) / 2889.878)
=0.39837881 / 0.3152313
=1.2638

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
=(219.502 - 2.733 - 239.432) / 3559.607
=-0.0064

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 Company has a M-score of -2.27 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 Company Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.07320.86171.20710.8530.99721.00331.04380.96820.97331.2463
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 -1.94-2.68-2.28-2.77-2.85-2.57-2.40-2.60-2.50-2.27

Crane Company Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 1.00130.96410.9760.9740.97650.97750.95910.9621.00051.2463
GMI 1.01210.99171.01251.01561.01581.00540.98610.9770.97970.9899
AQI 1.01191.01141.031.00891.00810.92850.92610.93510.94331.1861
SGI 1.12631.13221.10751.08041.04211.02711.0060.9930.99011.0063
DEPI 0.99970.96890.99480.97440.99521.0311.01971.07211.06271.1544
SGAI 0.9751.00210.98920.98840.990.92090.93250.93990.94070.9854
LVGI 1.04570.98870.94540.96660.93410.96180.96750.93430.86481.2638
TATA 0.0175-0.0444-0.0325-0.0377-0.0406-0.0058-0.0117-0.0048-0.0107-0.0064
M-score -2.28-2.60-2.52-2.59-2.62-2.50-2.58-2.54-2.51-2.27
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