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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.
During the past 13 years, the highest Beneish M-Score of Dana Holding Corp was 3.69. The lowest was -4.06. And the median was -2.65.
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 Dana Holding Corp 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 * 1.0121||+||0.528 * 1.0337||+||0.404 * 0.9866||+||0.892 * 0.9027||+||0.115 * 1.2227|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0614||+||4.679 * -0.0441||-||0.327 * 1.0179|
|This Year (Mar16) TTM:||Last Year (Mar15) TTM:|
|Accounts Receivable was $804 Mil.|
Revenue was 1449 + 1375 + 1468 + 1609 = $5,901 Mil.
Gross Profit was 199 + 172 + 213 + 236 = $820 Mil.
Total Current Assets was $2,563 Mil.
Total Assets was $4,468 Mil.
Property, Plant and Equipment(Net PPE) was $1,210 Mil.
Depreciation, Depletion and Amortization(DDA) was $172 Mil.
Selling, General & Admin. Expense(SGA) was $389 Mil.
Total Current Liabilities was $1,152 Mil.
Long-Term Debt was $1,574 Mil.
Net Income was 45 + -82 + 119 + 59 = $141 Mil.
Non Operating Income was -3 + -8 + -39 + -11 = $-61 Mil.
Cash Flow from Operations was -27 + 140 + 138 + 148 = $399 Mil.
|Accounts Receivable was $880 Mil.
Revenue was 1608 + 1582 + 1637 + 1710 = $6,537 Mil.
Gross Profit was 228 + 223 + 240 + 248 = $939 Mil.
Total Current Assets was $2,860 Mil.
Total Assets was $4,738 Mil.
Property, Plant and Equipment(Net PPE) was $1,131 Mil.
Depreciation, Depletion and Amortization(DDA) was $203 Mil.
Selling, General & Admin. Expense(SGA) was $406 Mil.
Total Current Liabilities was $1,268 Mil.
Long-Term Debt was $1,572 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(804 / 5901)||/||(880 / 6537)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(172 / 6537)||/||(199 / 5901)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (2563 + 1210) / 4468)||/||(1 - (2860 + 1131) / 4738)|
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.
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))|
|=||(203 / (203 + 1131))||/||(172 / (172 + 1210))|
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)|
|=||(389 / 5901)||/||(406 / 6537)|
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)|
|=||((1574 + 1152) / 4468)||/||((1572 + 1268) / 4738)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(141 - -61||-||399)||/||4468|
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.
Dana Holding Corp has a M-score of -2.74 suggests that the company will not be a manipulator.
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
Dana Holding Corp Annual Data
Dana Holding Corp Quarterly Data