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Dun & Bradstreet Corporation (NYSE:DNB)
Beneish M-Score
-2.72 (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.

Dun & Bradstreet Corporation has a M-score of -2.72 suggests that the company is not a manipulator.

DNB' s 10-Year Beneish M-Score Range
Min: -2.88   Max: -2.23
Current: -2.72

-2.88
-2.23

During the past 13 years, the highest Beneish M-Score of Dun & Bradstreet Corporation was -2.23. The lowest was -2.88. And the median was -2.64.


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 Dun & Bradstreet Corporation 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 * 1.0124+0.528 * 1.0289+0.404 * 0.9001+0.892 * 0.9953+0.115 * 1.0248
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9718+4.679 * -0.0387-0.327 * 1.1514
=-2.72

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $525 Mil.
Revenue was 476.7 + 411.1 + 386.4 + 381 = $1,655 Mil.
Gross Profit was 314.4 + 279.2 + 256.3 + 254.8 = $1,105 Mil.
Total Current Assets was $822 Mil.
Total Assets was $1,890 Mil.
Property, Plant and Equipment(Net PPE) was $40 Mil.
Depreciation, Depletion and Amortization(DDA) was $71 Mil.
Selling, General & Admin. Expense(SGA) was $583 Mil.
Total Current Liabilities was $852 Mil.
Long-Term Debt was $1,516 Mil.
Net Income was 75.3 + 72.8 + 57.5 + 52.9 = $259 Mil.
Non Operating Income was -0.2 + -0.2 + -0.1 + -1.2 = $-2 Mil.
Cash Flow from Operations was 34 + 64.6 + 62.4 + 172.3 = $333 Mil.
Accounts Receivable was $521 Mil.
Revenue was 463.1 + 413.2 + 383.9 + 402.8 = $1,663 Mil.
Gross Profit was 337.3 + 289 + 257.5 + 258.2 = $1,142 Mil.
Total Current Assets was $747 Mil.
Total Assets was $1,992 Mil.
Property, Plant and Equipment(Net PPE) was $41 Mil.
Depreciation, Depletion and Amortization(DDA) was $78 Mil.
Selling, General & Admin. Expense(SGA) was $602 Mil.
Total Current Liabilities was $877 Mil.
Long-Term Debt was $1,291 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)
=(524.8 / 1655.2) / (520.8 / 1663)
=0.31706138 / 0.31316897
=1.0124

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)
=(279.2 / 1663) / (314.4 / 1655.2)
=0.68671076 / 0.66741179
=1.0289

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 - (822.4 + 39.6) / 1890.3) / (1 - (747.4 + 40.6) / 1991.8)
=0.54398773 / 0.60437795
=0.9001

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
=1655.2 / 1663
=0.9953

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))
=(78.3 / (78.3 + 40.6)) / (71.2 / (71.2 + 39.6))
=0.65853659 / 0.64259928
=1.0248

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)
=(582.5 / 1655.2) / (602.2 / 1663)
=0.35192122 / 0.36211666
=0.9718

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)
=((1516 + 852.3) / 1890.3) / ((1290.7 + 876.7) / 1991.8)
=1.25286991 / 1.08816146
=1.1514

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
=(258.5 - -1.7 - 333.3) / 1890.3
=-0.0387

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.

Dun & Bradstreet Corporation has a M-score of -2.72 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 own currency.

Dun & Bradstreet Corporation Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.09931.02220.96361.02510.96241.02091.09250.95451.07311.0124
GMI 0.96240.99971.0130.96521.01291.02571.05411.00180.971.0289
AQI 0.97370.99850.97311.09860.98351.01391.16630.97610.9920.9001
SGI 1.01991.02091.06081.04431.07950.97720.99381.04880.94570.9953
DEPI 1.1190.91871.31850.82430.86671.06680.92570.87850.97121.0248
SGAI 1.03480.96160.97131.03880.94640.95620.98410.97850.98970.9718
LVGI 0.97211.02931.45731.06011.15980.91060.96940.96111.1221.1514
TATA -0.0541-0.0258-0.0471-0.0708-0.0826-0.0348-0.04690.0021-0.0237-0.0387
M-score -2.64-2.57-2.79-2.77-2.89-2.58-2.52-2.47-2.63-2.72

Dun & Bradstreet Corporation Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 0.95690.95450.94150.92511.01221.07311.05381.0351.02241.0124
GMI 0.67781.00181.0060.99370.98720.970.95390.96150.98341.0289
AQI 1.00260.97611.00381.00730.99690.9920.97040.96110.95720.9001
SGI 1.051.04881.04441.01310.97540.94570.93370.9530.96640.9953
DEPI 0.87280.87850.89930.90740.92130.97120.99771.02031.04211.0248
SGAI 0.95010.97850.98160.99691.01380.98970.98740.99580.96260.9718
LVGI 0.93790.96110.91831.03791.02291.1221.25071.17711.20221.1514
TATA -0.01510.0021-0.0124-0.0178-0.0059-0.0237-0.0289-0.0217-0.0341-0.0387
M-score -2.70-2.47-2.53-2.64-2.55-2.63-2.74-2.68-2.73-2.72
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