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Crane Co (NYSE:CR)
Beneish M-Score
-2.40 (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 -2.40 suggests that the company is not a manipulator.

CR' s Beneish M-Score Range Over the Past 10 Years
Min: -10000000   Max: -1.94
Current: -2.4

-10000000
-1.94

During the past 13 years, the highest Beneish M-Score of Crane Co was -1.94. The lowest was -10000000.00. 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 * 1.0016+0.528 * 1.0001+0.404 * 0.9669+0.892 * 0.9704+0.115 * 1.0389
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * -0.1648+4.679 * -0.0147-0.327 * 1.0403
=-2.40

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $430 Mil.
Revenue was 669.9 + 711.2 + 678.8 + 730.697 = $2,791 Mil.
Gross Profit was 238.2 + 240.5 + 236.8 + 249.103 = $965 Mil.
Total Current Assets was $1,240 Mil.
Total Assets was $3,403 Mil.
Property, Plant and Equipment(Net PPE) was $280 Mil.
Depreciation, Depletion and Amortization(DDA) was $68 Mil.
Selling, General & Admin. Expense(SGA) was $-20 Mil.
Total Current Liabilities was $652 Mil.
Long-Term Debt was $749 Mil.
Net Income was 56.9 + 55.8 + 51.1 + 56.172 = $220 Mil.
Non Operating Income was -0.3 + 0.4 + -0.3 + 3.775 = $4 Mil.
Cash Flow from Operations was 69.7 + 57.6 + -11.6 + 150.551 = $266 Mil.
Accounts Receivable was $443 Mil.
Revenue was 727.4 + 750.1 + 716.8 + 681.449 = $2,876 Mil.
Gross Profit was 251.1 + 262.1 + 254.1 + 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 $125 Mil.
Total Current Liabilities was $658 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)
=(430.1 / 2790.597) / (442.535 / 2875.749)
=0.15412473 / 0.15388513
=1.0016

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)
=(240.5 / 2875.749) / (238.2 / 2790.597)
=0.34570159 / 0.34566188
=1.0001

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 - (1240.3 + 280.1) / 3402.7) / (1 - (1226.084 + 294.762) / 3554.105)
=0.55317836 / 0.57208749
=0.9669

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
=2790.597 / 2875.749
=0.9704

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))
=(74.678 / (74.678 + 294.762)) / (67.666 / (67.666 + 280.1))
=0.20213837 / 0.19457336
=1.0389

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)
=(-20.047 / 2790.597) / (125.384 / 2875.749)
=-0.00718377 / 0.04360047
=-0.1648

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)
=((749.2 + 652.3) / 3402.7) / ((749.202 + 657.91) / 3554.105)
=0.4118788 / 0.39591177
=1.0403

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
=(219.972 - 3.575 - 266.251) / 3402.7
=-0.0147

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 -2.40 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.04150.90090.97391.0021.05851.02610.92531.30440.5171
GMI 0.96211.87390.52770.98530.98960.99181.00540.98990.515
AQI 1.03251.03620.97850.9661.04291.01140.92851.18610.98
SGI 1.09491.16050.99430.84341.00981.12741.03151.00631.8738
DEPI 1.10450.90381.06330.96930.96460.96891.0311.15441.0597
SGAI 1.0291.03331.06730.99630.96461.00250.920604.6095
LVGI 1.09141.80661.00430.49811.03930.98870.96181.26380.9875
TATA -0.0104-0.106-0.0209-0.02070.0071-0.0444-0.0058-0.00640.0001
M-score -2.44-2.73-2.87-2.57-2.38-2.55-2.54-2.05-3.02

Crane Co Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 0.95661.30441.17171.12891.02370.83320.88720.90391.00160.8284
GMI 0.97970.98990.99240.99230.98750.97970.99011.00321.00010.7269
AQI 0.94331.18611.18741.18081.18620.96290.97030.98510.96690.98
SGI 0.99011.00631.04821.09161.13061.1271.07541.02230.97041.1696
DEPI 1.06271.15441.00780.92640.82970.73610.86740.93161.03891.0597
SGAI 0.940700.04840.09060.21172.04645094591E+151.93390.7238-0.16487.3911
LVGI 0.86481.26381.33731.32841.42881.01061.03481.02821.04030.9875
TATA -0.0107-0.0064-0.0093-0.0164-0.0217-0.0214-0.0232-0.0227-0.01470.0001
M-score -2.55-2.05-2.20-2.25-2.40-351,989,562,697,207.75-2.83-2.63-2.40-3.73
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