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GuruFocus has detected 4 Warning Signs with Dun & Bradstreet Corp $DNB.
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Dun & Bradstreet Corp (NYSE:DNB)
Beneish M-Score
0.00 (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 Corp has a M-score of -2.83 suggests that the company is not a manipulator.

During the past 13 years, the highest Beneish M-Score of Dun & Bradstreet Corp was 0.00. The lowest was -2.89. 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 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 * 0.9641+0.528 * 0.9742+0.404 * 0.9705+0.892 * 1.0516+0.115 * 1.0548
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0908+4.679 * -0.0719-0.327 * 0.9866
=-2.83

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

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $387 Mil.
Revenue was 412.8 + 398.8 + 375 + 499.3 = $1,686 Mil.
Gross Profit was 282.1 + 265.8 + 242.6 + 354.4 = $1,145 Mil.
Total Current Assets was $765 Mil.
Total Assets was $2,017 Mil.
Property, Plant and Equipment(Net PPE) was $34 Mil.
Depreciation, Depletion and Amortization(DDA) was $67 Mil.
Selling, General & Admin. Expense(SGA) was $717 Mil.
Total Current Liabilities was $917 Mil.
Long-Term Debt was $1,586 Mil.
Net Income was -29.4 + 18.8 + 30 + 76.7 = $96 Mil.
Non Operating Income was -92.2 + -0.5 + 0.8 + -0.2 = $-92 Mil.
Cash Flow from Operations was 99.1 + 50.4 + 130.5 + 53.3 = $333 Mil.
Accounts Receivable was $382 Mil.
Revenue was 406.2 + 375.4 + 356.2 + 465.4 = $1,603 Mil.
Gross Profit was 273.8 + 239 + 225.2 + 322.6 = $1,061 Mil.
Total Current Assets was $763 Mil.
Total Assets was $2,082 Mil.
Property, Plant and Equipment(Net PPE) was $24 Mil.
Depreciation, Depletion and Amortization(DDA) was $55 Mil.
Selling, General & Admin. Expense(SGA) was $625 Mil.
Total Current Liabilities was $860 Mil.
Long-Term Debt was $1,760 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)
=(387.4 / 1685.9) / (382.1 / 1603.2)
=0.22978824 / 0.23833583
=0.9641

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)
=(1060.6 / 1603.2) / (1144.9 / 1685.9)
=0.6615519 / 0.67910315
=0.9742

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 - (764.8 + 34) / 2016.9) / (1 - (762.9 + 23.6) / 2082.4)
=0.60394665 / 0.6223108
=0.9705

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
=1685.9 / 1603.2
=1.0516

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))
=(55 / (55 + 23.6)) / (67 / (67 + 34))
=0.69974555 / 0.66336634
=1.0548

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)
=(716.7 / 1685.9) / (624.8 / 1603.2)
=0.42511418 / 0.38972056
=1.0908

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)
=((1586.4 + 916.5) / 2016.9) / ((1759.9 + 859.5) / 2082.4)
=1.24096386 / 1.25787553
=0.9866

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
=(96.1 - -92.1 - 333.3) / 2016.9
=-0.0719

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 Corp has a M-score of -2.83 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.

Dun & Bradstreet Corp Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.02810.96011.02841.09340.95951.07161.07580.95411.0073
GMI 0.96521.01291.02571.05411.00180.971.0350.99710.9973
AQI 1.09860.98351.01391.16630.97610.9920.90010.95481.0897
SGI 1.04431.07950.97720.99381.04880.94570.93711.01671.0332
DEPI 0.82430.86671.06680.92570.87850.97121.09030.85711.0312
SGAI 1.03880.94640.95620.98410.97850.98970.94561.06091.1172
LVGI 1.06011.15980.91060.96940.96111.1221.15141.00910.9613
TATA -0.0708-0.0826-0.0348-0.0469-0.0159-0.0237-0.03940.0042-0.0734
M-score -2.77-2.89-2.57-2.52-2.55-2.63-2.70-2.54-2.76

Dun & Bradstreet Corp Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 1.13080.94121.0010.93440.90271.02110.91111.03160.9641
GMI 1.05350.99561.00461.01350.98560.99870.98370.96520.9742
AQI 0.86820.95480.99871.11321.15061.08971.07910.94930.9705
SGI 0.92641.03071.01361.03051.05431.01921.04771.05761.0516
DEPI 1.15420.85710.92130.82410.80751.03120.961.03751.0548
SGAI 1.01511.06641.06221.08051.09061.11141.12911.13581.0908
LVGI 1.11461.00910.96410.95320.93040.96130.97180.96260.9866
TATA -0.00740.0156-0.0188-0.0442-0.0509-0.0734-0.0676-0.0522-0.0719
M-score -2.51-2.49-2.56-2.69-2.72-2.75-2.83-2.69-2.83
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