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FMC Corporation (NYSE:FMC)
Beneish M-Score
-1.73 (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.

FMC Corporation has a M-score of -1.73 signals that the company is a manipulator.

FMC' s 10-Year Beneish M-Score Range
Min: -3.32   Max: -1.73
Current: -1.73

-3.32
-1.73

During the past 13 years, the highest Beneish M-Score of FMC Corporation was -1.73. The lowest was -3.32. And the median was -2.52.


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 FMC 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 * 1.2387+0.528 * 1.0226+0.404 * 1.4334+0.892 * 1.004+0.115 * 0.7625
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.6521+4.679 * 0.105-0.327 * 1.0263
=-1.73

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $1,866 Mil.
Revenue was 887.1 + 659.4 + 1092.2 + 1015.9 = $3,655 Mil.
Gross Profit was 305.8 + 250.7 + 365.2 + 323.7 = $1,245 Mil.
Total Current Assets was $3,806 Mil.
Total Assets was $7,075 Mil.
Property, Plant and Equipment(Net PPE) was $1,113 Mil.
Depreciation, Depletion and Amortization(DDA) was $138 Mil.
Selling, General & Admin. Expense(SGA) was $831 Mil.
Total Current Liabilities was $1,981 Mil.
Long-Term Debt was $2,051 Mil.
Net Income was 742.3 + -46.8 + 76.5 + 56.3 = $828 Mil.
Non Operating Income was 0.1 + -0.1 + -1.5 + 0.4 = $-1 Mil.
Cash Flow from Operations was 124.6 + -297.2 + 172 + 87.1 = $87 Mil.
Accounts Receivable was $1,500 Mil.
Revenue was 794.9 + 756.9 + 1130.7 + 957.4 = $3,640 Mil.
Gross Profit was 316.1 + 293 + 354.9 + 304.4 = $1,268 Mil.
Total Current Assets was $2,752 Mil.
Total Assets was $5,127 Mil.
Property, Plant and Equipment(Net PPE) was $1,285 Mil.
Depreciation, Depletion and Amortization(DDA) was $118 Mil.
Selling, General & Admin. Expense(SGA) was $501 Mil.
Total Current Liabilities was $1,693 Mil.
Long-Term Debt was $1,154 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)
=(1865.5 / 3654.6) / (1500 / 3639.9)
=0.51045258 / 0.41209923
=1.2387

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)
=(250.7 / 3639.9) / (305.8 / 3654.6)
=0.34847111 / 0.34077601
=1.0226

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 - (3805.7 + 1112.8) / 7075.2) / (1 - (2752 + 1284.9) / 5127.3)
=0.30482531 / 0.21266554
=1.4334

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
=3654.6 / 3639.9
=1.004

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))
=(117.6 / (117.6 + 1284.9)) / (137.5 / (137.5 + 1112.8))
=0.08385027 / 0.10997361
=0.7625

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)
=(830.7 / 3654.6) / (500.8 / 3639.9)
=0.22730258 / 0.1375862
=1.6521

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)
=((2050.9 + 1980.6) / 7075.2) / ((1153.7 + 1692.9) / 5127.3)
=0.56980721 / 0.55518499
=1.0263

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
=(828.3 - -1.1 - 86.5) / 7075.2
=0.105

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.

FMC Corporation has a M-score of -1.73 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 own currency.

FMC Corporation Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.98490.99550.99340.96921.20151.03191.00741.14211.21661.1321
GMI 0.94250.9870.99180.96841.00820.92620.97560.92921.07521.0158
AQI 0.90870.97590.93580.93911.051.0431.0421.1920.70441.0327
SGI 1.04621.09321.12231.18320.90721.10261.08391.00951.13631.042
DEPI 0.90791.04190.91041.07151.00240.91761.11681.05181.1691.0148
SGAI 1.01430.96380.98610.90281.05481.15710.99281.09630.92691.1558
LVGI 0.85980.9550.94611.05410.91591.06791.03431.03891.26390.9563
TATA -0.0447-0.0493-0.051-0.002-0.024-0.0556-0.00480.0131-0.0065-0.0122
M-score -2.70-2.62-2.64-2.39-2.45-2.70-2.41-2.26-2.32-2.37

FMC Corporation Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 1.15391.12791.14231.27841.22441.32981.31921.24891.02391.2387
GMI 0.94360.94820.99911.05251.07261.05911.02570.97540.97581.0226
AQI 1.00010.98090.98410.70440.90250.90720.90161.03270.96741.4334
SGI 1.00840.97441.02331.08131.04721.03291.01060.94450.95741.004
DEPI 1.2431.33281.0291.1691.02881.01481.01471.01480.69890.7625
SGAI 1.06741.05841.00360.9380.96860.96921.02231.25411.63161.6521
LVGI 1.05261.01021.23491.26391.1331.18880.95720.95631.05351.0263
TATA 0.02840.0221-0.0014-0.0064-0.00920.0020.0148-0.01220.00430.105
M-score -2.23-2.29-2.42-2.33-2.31-2.20-2.12-2.39-2.66-1.73
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