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GuruFocus has detected 6 Warning Signs with Dana Inc $DAN.
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Dana Inc (NYSE:DAN)
Beneish M-Score
-1.86 (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.

Dana Inc has a M-score of -1.87 signals that the company is a manipulator.

DAN' s Beneish M-Score Range Over the Past 10 Years
Min: -3.44   Max: -1.86
Current: -1.86

-3.44
-1.86

During the past 13 years, the highest Beneish M-Score of Dana Inc was -1.86. The lowest was -3.44. And the median was -2.62.


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 Dana Inc 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 * 1.1144+0.528 * 0.9671+0.404 * 1.4641+0.892 * 0.9614+0.115 * 1.1371
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0801+4.679 * 0.0763-0.327 * 0.954
=-1.87

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $721 Mil.
Revenue was 1447 + 1384 + 1546 + 1449 = $5,826 Mil.
Gross Profit was 204 + 208 + 233 + 199 = $844 Mil.
Total Current Assets was $2,284 Mil.
Total Assets was $4,860 Mil.
Property, Plant and Equipment(Net PPE) was $1,413 Mil.
Depreciation, Depletion and Amortization(DDA) was $182 Mil.
Selling, General & Admin. Expense(SGA) was $406 Mil.
Total Current Liabilities was $1,253 Mil.
Long-Term Debt was $1,595 Mil.
Net Income was 485 + 57 + 53 + 45 = $640 Mil.
Non Operating Income was -84 + -11 + -17 + -3 = $-115 Mil.
Cash Flow from Operations was 202 + 24 + 185 + -27 = $384 Mil.
Accounts Receivable was $673 Mil.
Revenue was 1375 + 1468 + 1609 + 1608 = $6,060 Mil.
Gross Profit was 172 + 213 + 236 + 228 = $849 Mil.
Total Current Assets was $2,431 Mil.
Total Assets was $4,301 Mil.
Property, Plant and Equipment(Net PPE) was $1,167 Mil.
Depreciation, Depletion and Amortization(DDA) was $174 Mil.
Selling, General & Admin. Expense(SGA) was $391 Mil.
Total Current Liabilities was $1,089 Mil.
Long-Term Debt was $1,553 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)
=(721 / 5826) / (673 / 6060)
=0.12375558 / 0.11105611
=1.1144

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)
=(849 / 6060) / (844 / 5826)
=0.14009901 / 0.14486783
=0.9671

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 - (2284 + 1413) / 4860) / (1 - (2431 + 1167) / 4301)
=0.23930041 / 0.16345036
=1.4641

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
=5826 / 6060
=0.9614

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))
=(174 / (174 + 1167)) / (182 / (182 + 1413))
=0.12975391 / 0.11410658
=1.1371

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)
=(406 / 5826) / (391 / 6060)
=0.06968761 / 0.06452145
=1.0801

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)
=((1595 + 1253) / 4860) / ((1553 + 1089) / 4301)
=0.58600823 / 0.61427575
=0.954

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
=(640 - -115 - 384) / 4860
=0.0763

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 Inc has a M-score of -1.87 signals that the company is likely to 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 local exchange's currency.

Dana Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.28640.73861.36240.98110.76840.87261.03460.9740.97331.1144
GMI 0.70741.78630.67670.42280.92470.88190.9920.95171.01940.9671
AQI 0.5581.61210.91280.80211.15121.00580.77851.09661.03451.4641
SGI 1.02550.84210.71191.13261.27410.95760.9370.97750.91580.9614
DEPI 00.77530.8351.11910.9781.05541.0371.1491.18181.1371
SGAI 0.84940.98581.45111.12560.80061.08791.0321.02551.03881.0801
LVGI 1.47721.01320.90531.01121.00910.94911.34561.05081.05760.954
TATA -0.01430.0342-0.1244-0.0541-0.0337-0.0066-0.0661-0.0126-0.04530.0763
M-score -2.84-2.07-3.26-3.03-2.56-2.72-3.02-2.57-2.77-1.87

Dana Inc Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 0.99880.9740.94990.99020.91290.97331.01211.01111.12711.1144
GMI 0.95530.95170.9650.9640.97671.01941.03371.02921.01760.9671
AQI 0.8351.09661.1311.13871.26011.03450.98660.97260.88311.4641
SGI 0.98590.97750.9640.96190.94110.91580.90270.90710.91810.9614
DEPI 1.0811.1491.12871.16031.17511.18181.22271.15321.13421.1371
SGAI 1.03421.02551.02220.99951.02411.03881.06141.08861.07551.0801
LVGI 1.03471.05081.05771.06731.04431.05761.01791.04961.03510.954
TATA -0.0754-0.0133-0.00130.00770.0183-0.0453-0.0441-0.0512-0.04550.0763
M-score -2.94-2.58-2.54-2.45-2.43-2.77-2.74-2.80-2.70-1.87
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