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FMC Corporation (NYSE:FMC)
Beneish M-Score
-2.31 (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 -2.31 suggests that the company is not a manipulator.

FMC' s 10-Year Beneish M-Score Range
Min: -3.32   Max: -2.03
Current: -2.31

-3.32
-2.03

During the past 13 years, the highest Beneish M-Score of FMC Corporation was -2.03. The lowest was -3.32. And the median was -2.53.


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 * 1.2207+0.528 * 1.0764+0.404 * 0.9025+0.892 * 1.0504+0.115 * 0.9633
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9439+4.679 * -0.0093-0.327 * 1.133
=-2.31

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $1,568 Mil.
Revenue was 941.8 + 1130.7 + 957.4 + 959.4 = $3,989 Mil.
Gross Profit was 328.5 + 354.9 + 304.4 + 342.9 = $1,331 Mil.
Total Current Assets was $2,753 Mil.
Total Assets was $5,091 Mil.
Property, Plant and Equipment(Net PPE) was $1,269 Mil.
Depreciation, Depletion and Amortization(DDA) was $132 Mil.
Selling, General & Admin. Expense(SGA) was $525 Mil.
Total Current Liabilities was $1,727 Mil.
Long-Term Debt was $1,154 Mil.
Net Income was 65.6 + 27.1 + 17.9 + 118 = $229 Mil.
Non Operating Income was 0 + -0.4 + -0.1 + -0.2 = $-1 Mil.
Cash Flow from Operations was -96.8 + -20.5 + 116.1 + 277.6 = $276 Mil.
Accounts Receivable was $1,223 Mil.
Revenue was 990.2 + 1000 + 902.4 + 905.2 = $3,798 Mil.
Gross Profit was 369.7 + 340.6 + 315.5 + 337.8 = $1,364 Mil.
Total Current Assets was $2,285 Mil.
Total Assets was $4,448 Mil.
Property, Plant and Equipment(Net PPE) was $1,127 Mil.
Depreciation, Depletion and Amortization(DDA) was $112 Mil.
Selling, General & Admin. Expense(SGA) was $529 Mil.
Total Current Liabilities was $988 Mil.
Long-Term Debt was $1,234 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)
=(1568.3 / 3989.3) / (1223.1 / 3797.8)
=0.39312661 / 0.32205487
=1.2207

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)
=(354.9 / 3797.8) / (328.5 / 3989.3)
=0.35904998 / 0.33356729
=1.0764

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 - (2752.5 + 1268.7) / 5090.7) / (1 - (2285.3 + 1127.3) / 4448)
=0.21008899 / 0.23277878
=0.9025

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
=3989.3 / 3797.8
=1.0504

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))
=(112.3 / (112.3 + 1127.3)) / (131.7 / (131.7 + 1268.7))
=0.09059374 / 0.09404456
=0.9633

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)
=(524.8 / 3989.3) / (529.3 / 3797.8)
=0.1315519 / 0.13937016
=0.9439

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)
=((1154 + 1726.7) / 5090.7) / ((1233.9 + 987.7) / 4448)
=0.56587503 / 0.49946043
=1.133

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
=(228.6 - -0.7 - 276.4) / 5090.7
=-0.0093

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 -2.31 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 0.93970.98490.99550.99340.96921.20151.03191.00741.08811.2769
GMI 0.96380.94250.9870.99180.96841.00820.92620.97560.96591.0344
AQI 1.09110.90870.97590.93580.93911.051.0431.0421.01850.8244
SGI 1.06761.04621.09321.12231.18320.90721.10261.08391.10971.0337
DEPI 0.9230.90791.04190.91041.07151.00240.91761.11681.22841.001
SGAI 1.00751.01430.96380.98610.90281.05481.15710.99281.07350.9466
LVGI 0.88580.85980.9550.94611.05410.91591.06791.02751.02981.2837
TATA -0.0129-0.0447-0.0493-0.051-0.002-0.024-0.0556-0.00480.013-0.0065
M-score -2.49-2.70-2.62-2.64-2.39-2.45-2.70-2.41-2.25-2.36

FMC Corporation Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.96631.02111.05951.08811.07961.03191.0941.22541.22071.3169
GMI 0.97590.99070.98140.96590.96950.98491.01811.05311.07641.0611
AQI 1.04641.09621.08521.01851.00010.98090.98410.82440.90250.9072
SGI 1.11691.13371.1151.10971.07781.06511.06841.07721.05041.043
DEPI 1.08081.05271.2091.22841.2431.33281.0291.0010.96330.8925
SGAI 0.97830.97361.00031.07351.05451.04481.00120.94520.94390.9076
LVGI 1.12551.13581.12611.02981.05261.01021.23491.28371.1331.1888
TATA -0.0166-0.00630.01180.02920.04410.0219-0.0016-0.0066-0.00930.0018
M-score -2.51-2.37-2.26-2.17-2.15-2.28-2.41-2.36-2.31-2.21
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