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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 * 1.0111||+||0.528 * 1.0292||+||0.404 * 0.9726||+||0.892 * 0.9071||+||0.115 * 1.1532|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0886||+||4.679 * -0.0512||-||0.327 * 1.0496|
|This Year (Jun16) TTM:||Last Year (Jun15) TTM:|
|Accounts Receivable was $808 Mil.|
Revenue was 1546 + 1449 + 1375 + 1468 = $5,838 Mil.
Gross Profit was 233 + 199 + 172 + 213 = $817 Mil.
Total Current Assets was $2,637 Mil.
Total Assets was $4,567 Mil.
Property, Plant and Equipment(Net PPE) was $1,241 Mil.
Depreciation, Depletion and Amortization(DDA) was $174 Mil.
Selling, General & Admin. Expense(SGA) was $394 Mil.
Total Current Liabilities was $1,237 Mil.
Long-Term Debt was $1,637 Mil.
Net Income was 53 + 45 + -82 + 119 = $135 Mil.
Non Operating Income was -17 + -3 + -8 + -39 = $-67 Mil.
Cash Flow from Operations was 185 + -27 + 140 + 138 = $436 Mil.
|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.
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)|
|=||(808 / 5838)||/||(881 / 6436)|
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)|
|=||(927 / 6436)||/||(817 / 5838)|
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 - (2637 + 1241) / 4567)||/||(1 - (2879 + 1168) / 4790)|
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))|
|=||(193 / (193 + 1168))||/||(174 / (174 + 1241))|
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)|
|=||(394 / 5838)||/||(399 / 6436)|
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)|
|=||((1637 + 1237) / 4567)||/||((1570 + 1302) / 4790)|
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|
|=||(135 - -67||-||436)||/||4567|
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 -2.80 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