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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 4.00. The lowest was -3.92. 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 * 0.9902||+||0.528 * 0.964||+||0.404 * 1.1387||+||0.892 * 0.9619||+||0.115 * 1.1603|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9995||+||4.679 * 0.0067||-||0.327 * 1.0673|
|This Year (Jun15) TTM:||Last Year (Jun14) TTM:|
|Accounts Receivable was $881 Mil.|
Revenue was 1609 + 1608 + 1582 + 1637 = $6,436 Mil.
Gross Profit was 236 + 228 + 223 + 240 = $927 Mil.
Total Current Assets was $2,879 Mil.
Total Assets was $4,790 Mil.
Property, Plant and Equipment(Net PPE) was $1,168 Mil.
Depreciation, Depletion and Amortization(DDA) was $193 Mil.
Selling, General & Admin. Expense(SGA) was $399 Mil.
Total Current Liabilities was $1,302 Mil.
Long-Term Debt was $1,570 Mil.
Net Income was 59 + 63 + 109 + 90 = $321 Mil.
Non Operating Income was -11 + 9 + -124 + 0 = $-126 Mil.
Cash Flow from Operations was 148 + -20 + 208 + 79 = $415 Mil.
|Accounts Receivable was $925 Mil.
Revenue was 1710 + 1688 + 1624 + 1669 = $6,691 Mil.
Gross Profit was 248 + 234 + 212 + 235 = $929 Mil.
Total Current Assets was $3,258 Mil.
Total Assets was $5,212 Mil.
Property, Plant and Equipment(Net PPE) was $1,244 Mil.
Depreciation, Depletion and Amortization(DDA) was $245 Mil.
Selling, General & Admin. Expense(SGA) was $415 Mil.
Total Current Liabilities was $1,360 Mil.
Long-Term Debt was $1,568 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)|
|=||(881 / 6436)||/||(925 / 6691)|
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)|
|=||(228 / 6691)||/||(236 / 6436)|
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 - (2879 + 1168) / 4790)||/||(1 - (3258 + 1244) / 5212)|
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))|
|=||(245 / (245 + 1244))||/||(193 / (193 + 1168))|
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)|
|=||(399 / 6436)||/||(415 / 6691)|
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)|
|=||((1570 + 1302) / 4790)||/||((1568 + 1360) / 5212)|
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|
|=||(321 - -126||-||415)||/||4790|
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 -2.46 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