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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.
Fluor Corp has a M-score of -3.09 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Fluor Corp was -1.66. The lowest was -3.23. And the median was -2.40.
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 Fluor 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 * 0.7915||+||0.528 * 0.6389||+||0.404 * 1.1956||+||0.892 * 0.8974||+||0.115 * 1.07|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.3785||+||4.679 * -0.0434||-||0.327 * 0.873|
|This Year (Mar14) TTM:||Last Year (Mar13) TTM:|
|Accounts Receivable was $1,123 Mil.|
Revenue was 5384.636 + 6291.405 + 6684.216 + 7190.328 = $25,551 Mil.
Gross Profit was 312.332 + 335.93 + 354.531 + 332.856 = $1,336 Mil.
Total Current Assets was $5,615 Mil.
Total Assets was $7,992 Mil.
Property, Plant and Equipment(Net PPE) was $960 Mil.
Depreciation, Depletion and Amortization(DDA) was $201 Mil.
Selling, General & Admin. Expense(SGA) was $180 Mil.
Total Current Liabilities was $3,145 Mil.
Long-Term Debt was $497 Mil.
Net Income was 149.074 + 166.795 + 173.046 + 161.412 = $650 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 186.714 + 76.256 + 477.118 + 257.256 = $997 Mil.
|Accounts Receivable was $1,581 Mil.
Revenue was 7185.624 + 7022.722 + 7136.056 + 7128.249 = $28,473 Mil.
Gross Profit was 341.874 + -15.642 + 306.275 + 318.466 = $951 Mil.
Total Current Assets was $6,261 Mil.
Total Assets was $8,463 Mil.
Property, Plant and Equipment(Net PPE) was $947 Mil.
Depreciation, Depletion and Amortization(DDA) was $215 Mil.
Selling, General & Admin. Expense(SGA) was $146 Mil.
Total Current Liabilities was $3,921 Mil.
Long-Term Debt was $496 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)|
|=||(1122.629 / 25550.585)||/||(1580.539 / 28472.651)|
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)|
|=||(335.93 / 28472.651)||/||(312.332 / 25550.585)|
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 - (5614.751 + 960.064) / 7991.937)||/||(1 - (6260.805 + 947.058) / 8463.034)|
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))|
|=||(215.164 / (215.164 + 947.058))||/||(200.874 / (200.874 + 960.064))|
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)|
|=||(180.319 / 25550.585)||/||(145.77 / 28472.651)|
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)|
|=||((496.715 + 3144.763) / 7991.937)||/||((496.274 + 3920.737) / 8463.034)|
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|
|=||(650.327 - 0||-||997.344)||/||7991.937|
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.
Fluor Corp has a M-score of -3.09 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
Fluor Corp Annual Data
Fluor Corp Quarterly Data