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GuruFocus has detected 3 Warning Signs with NTT DOCOMO Inc $DCM.
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NTT DOCOMO Inc (NYSE:DCM)
Beneish M-Score
-2.94 (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.

NTT DOCOMO Inc has a M-score of -2.92 suggests that the company is not a manipulator.

DCM' s Beneish M-Score Range Over the Past 10 Years
Min: -6.89   Max: -2.27
Current: -2.94

-6.89
-2.27

During the past 13 years, the highest Beneish M-Score of NTT DOCOMO Inc was -2.27. The lowest was -6.89. And the median was -3.00.


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 NTT DOCOMO 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 * 0.8655+0.528 * 1.0078+0.404 * 0.9521+0.892 * 1.1604+0.115 * 1.1719
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9731+4.679 * -0.0964-0.327 * 1.0439
=-2.92

* 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 $1,989 Mil.
Revenue was 10183.3564515 + 11589.9406883 + 10523.593059 + 10126.6871923 = $42,424 Mil.
Gross Profit was 5308.65591764 + 6315.03090359 + 6162.39633454 + 4743.45998511 = $22,530 Mil.
Total Current Assets was $22,557 Mil.
Total Assets was $62,040 Mil.
Property, Plant and Equipment(Net PPE) was $21,474 Mil.
Depreciation, Depletion and Amortization(DDA) was $4,607 Mil.
Selling, General & Admin. Expense(SGA) was $9,112 Mil.
Total Current Liabilities was $9,214 Mil.
Long-Term Debt was $1,897 Mil.
Net Income was 1586.39667374 + 1950.72324514 + 1963.47634429 + 495.246241755 = $5,996 Mil.
Non Operating Income was 70.0959757099 + -4.45058815554 + -37.1520319238 + 19.0203459259 = $48 Mil.
Cash Flow from Operations was 2182.25988184 + 4204.24368002 + 2314.11407022 + 3225.67534182 = $11,926 Mil.
Accounts Receivable was $1,981 Mil.
Revenue was 9606.38796399 + 9472.70690384 + 8704.13987872 + 8776.28961456 = $36,560 Mil.
Gross Profit was 5100.25897151 + 5231.67337508 + 4950.1772571 + 4284.43159779 = $19,567 Mil.
Total Current Assets was $21,691 Mil.
Total Assets was $59,804 Mil.
Property, Plant and Equipment(Net PPE) was $19,879 Mil.
Depreciation, Depletion and Amortization(DDA) was $5,189 Mil.
Selling, General & Admin. Expense(SGA) was $8,069 Mil.
Total Current Liabilities was $8,449 Mil.
Long-Term Debt was $1,811 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)
=(1989.40327471 / 42423.5773912) / (1980.75389485 / 36559.5243611)
=0.04689381 / 0.05417887
=0.8655

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)
=(19566.5412015 / 36559.5243611) / (22529.5431409 / 42423.5773912)
=0.53519682 / 0.53106184
=1.0078

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 - (22556.5849785 + 21474.1103518) / 62039.9213435) / (1 - (21690.7304641 + 19878.9575369) / 59803.5516093)
=0.29028448 / 0.304896
=0.9521

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
=42423.5773912 / 36559.5243611
=1.1604

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))
=(5189.1780209 / (5189.1780209 + 19878.9575369)) / (4607.02122609 / (4607.02122609 + 21474.1103518))
=0.20700295 / 0.17664192
=1.1719

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)
=(9111.67800878 / 42423.5773912) / (8069.22929292 / 36559.5243611)
=0.21477863 / 0.22071483
=0.9731

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)
=((1897.18624702 + 9213.78022571) / 62039.9213435) / ((1810.90968882 + 8449.0237185) / 59803.5516093)
=0.17909382 / 0.1715606
=1.0439

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
=(5995.84250492 - 47.5137015565 - 11926.2929739) / 62039.9213435
=-0.0964

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.

NTT DOCOMO Inc has a M-score of -2.92 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 local exchange's currency.

NTT DOCOMO Inc Annual Data

Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14Mar15Mar16
DSRI 1.43380.79621.29331.04151.10261.06150.251.1030.95280.8707
GMI 1.04191.00270.94490.98560.99351.0091.03551.02961.08431.0215
AQI 0.92961.06761.17181.01841.00670.951.11980.97530.96230.9788
SGI 1.00721.14270.9721.0391.09550.99380.91740.92420.83521.101
DEPI 1.02540.95120.93471.08560.98341.01360.99040.97861.05421.0193
SGAI 9.56590.92291.0111.0730.99420.96511.00920.93020.98310.9099
LVGI 0.8650.98511.02940.88330.84760.94650.94541.04640.98291.0688
TATA -0.0864-0.1712-0.1008-0.1027-0.1164-0.0936-0.0611-0.0732-0.078-0.0908
M-score -3.91-3.30-2.69-2.85-2.80-2.86-3.45-2.80-2.99-2.94

NTT DOCOMO Inc Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 1.02970.9270.90080.84631.06331.0650.99131.04671.03460.8655
GMI 1.07331.05761.08131.08151.04861.04821.0281.00321.00631.0078
AQI 1.03380.98950.96230.94110.88530.92140.97880.98760.97030.9521
SGI 0.89260.90940.88340.85990.8570.88850.96711.06321.14261.1604
DEPI 1.02920.98741.00811.02831.08811.12681.12821.18261.20581.1719
SGAI 0.92220.98520.98190.96560.96750.90570.91130.93390.93620.9731
LVGI 0.99061.11830.98291.08831.04560.941.06880.9571.0481.0439
TATA -0.0774-0.0988-0.0831-0.0911-0.0796-0.08-0.0875-0.0761-0.0813-0.0964
M-score -2.84-3.10-3.03-3.17-2.94-2.85-2.91-2.69-2.69-2.92
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