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FMC Corporation (NYSE:FMC)
Beneish M-Score
-2.32 (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 -2.32 suggests that the company is not a manipulator.

FMC' s 10-Year Beneish M-Score Range
Min: -3.15   Max: -2.03
Current: -2.32

-3.15
-2.03

During the past 13 years, the highest Beneish M-Score of FMC Corporation was -2.03. The lowest was -3.15. And the median was -2.50.


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 * 1.2395+0.528 * 1.0715+0.404 * 0.7044+0.892 * 1.1268+0.115 * 1.169
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9367+4.679 * -0.0066-0.327 * 1.277
=-2.32

* 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 $1,565 Mil.
Revenue was 1130.7 + 957.4 + 959.4 + 990.2 = $4,038 Mil.
Gross Profit was 354.9 + 304.4 + 342.9 + 369.7 = $1,372 Mil.
Total Current Assets was $2,945 Mil.
Total Assets was $5,235 Mil.
Property, Plant and Equipment(Net PPE) was $1,248 Mil.
Depreciation, Depletion and Amortization(DDA) was $127 Mil.
Selling, General & Admin. Expense(SGA) was $537 Mil.
Total Current Liabilities was $1,987 Mil.
Long-Term Debt was $1,187 Mil.
Net Income was 27.1 + 17.9 + 118 + 130.9 = $294 Mil.
Non Operating Income was -0.4 + -0.1 + -0.2 + 0.5 = $-0 Mil.
Cash Flow from Operations was -20.5 + 116.1 + 277.6 + -44.5 = $329 Mil.
Accounts Receivable was $1,121 Mil.
Revenue was 915.5 + 821.9 + 905.2 + 940.7 = $3,583 Mil.
Gross Profit was 321.5 + 298 + 337.8 + 347.3 = $1,305 Mil.
Total Current Assets was $2,182 Mil.
Total Assets was $4,374 Mil.
Property, Plant and Equipment(Net PPE) was $956 Mil.
Depreciation, Depletion and Amortization(DDA) was $116 Mil.
Selling, General & Admin. Expense(SGA) was $509 Mil.
Total Current Liabilities was $1,136 Mil.
Long-Term Debt was $941 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)
=(1565.3 / 4037.7) / (1120.7 / 3583.3)
=0.3876712 / 0.3127564
=1.2395

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)
=(304.4 / 3583.3) / (354.9 / 4037.7)
=0.36407781 / 0.33977264
=1.0715

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 - (2945 + 1248.3) / 5235.2) / (1 - (2181.9 + 956.2) / 4373.9)
=0.19901818 / 0.28253961
=0.7044

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
=4037.7 / 3583.3
=1.1268

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))
=(115.9 / (115.9 + 956.2)) / (127.2 / (127.2 + 1248.3))
=0.10810559 / 0.09247546
=1.169

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)
=(536.7 / 4037.7) / (508.5 / 3583.3)
=0.13292221 / 0.1419083
=0.9367

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)
=((1186.5 + 1986.7) / 5235.2) / ((940.6 + 1135.5) / 4373.9)
=0.60612775 / 0.47465649
=1.277

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
=(293.9 - -0.2 - 328.7) / 5235.2
=-0.0066

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 -2.32 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.

FMC Corporation Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.93970.98490.99550.99340.96921.20151.03191.06971.12261.2291
GMI 0.96380.94250.9870.99180.96841.00820.92620.97560.92921.0752
AQI 1.09110.90870.97590.93580.93911.051.0431.0421.1920.7044
SGI 1.06761.04621.09321.12231.18320.90721.10261.08391.00951.1363
DEPI 0.9230.90791.04190.91041.07151.00240.91761.11681.05181.169
SGAI 1.00751.01430.96380.98610.90281.05481.15710.99281.09630.9269
LVGI 0.88580.85980.9550.94611.05410.91591.06791.03431.03891.277
TATA -0.0129-0.0447-0.0493-0.051-0.002-0.024-0.0556-0.00480.0131-0.0065
M-score -2.49-2.70-2.62-2.64-2.39-2.45-2.70-2.36-2.28-2.32

FMC Corporation Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 0.96931.06970.96631.02111.08331.06831.12871.0781.09361.2395
GMI 0.9570.97560.97590.99070.97290.94920.9530.96861.01911.0715
AQI 1.07081.0421.04641.09621.08521.1921.00010.98090.98410.7044
SGI 1.08321.08391.11691.13371.09041.06081.0311.01951.06881.1268
DEPI 1.03691.11681.08081.05271.2091.05181.19391.22361.0291.169
SGAI 1.1110.99280.97830.97361.00471.08331.06371.05391.00050.9367
LVGI 1.02861.03431.12551.13581.12611.03891.05261.01021.23491.277
TATA -0.0404-0.0048-0.0166-0.0245-0.00570.01310.02820.022-0.0014-0.0066
M-score -2.64-2.36-2.51-2.46-2.35-2.27-2.23-2.30-2.41-2.32
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