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FMC Corporation (NYSE:FMC)
Beneish M-Score
-2.20 (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 -2.20 signals that the company is a manipulator.

FMC' s 10-Year Beneish M-Score Range
Min: -3.32   Max: -2.03
Current: -2.2

-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 -2.52.


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 * 1.2048+0.528 * 1.1021+0.404 * 0.9072+0.892 * 1.1401+0.115 * 0.8925
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8959+4.679 * 0.0018-0.327 * 1.1888
=-2.20

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $1,500 Mil.
Revenue was 987.8 + 941.8 + 1130.7 + 957.4 = $4,018 Mil.
Gross Profit was 357.6 + 328.5 + 354.9 + 304.4 = $1,345 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 $135 Mil.
Selling, General & Admin. Expense(SGA) was $511 Mil.
Total Current Liabilities was $1,693 Mil.
Long-Term Debt was $1,154 Mil.
Net Income was 109.1 + 65.6 + 27.1 + 17.9 = $220 Mil.
Non Operating Income was 0.2 + 0 + -0.4 + -0.1 = $-0 Mil.
Cash Flow from Operations was 211.9 + -96.8 + -20.5 + 116.1 = $211 Mil.
Accounts Receivable was $1,092 Mil.
Revenue was 876 + 910.7 + 915.5 + 821.9 = $3,524 Mil.
Gross Profit was 327.5 + 353.6 + 321.5 + 298 = $1,301 Mil.
Total Current Assets was $2,183 Mil.
Total Assets was $4,350 Mil.
Property, Plant and Equipment(Net PPE) was $1,147 Mil.
Depreciation, Depletion and Amortization(DDA) was $107 Mil.
Selling, General & Admin. Expense(SGA) was $500 Mil.
Total Current Liabilities was $1,269 Mil.
Long-Term Debt was $762 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)
=(1500 / 4017.7) / (1092.1 / 3524.1)
=0.37334794 / 0.30989472
=1.2048

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)
=(328.5 / 3524.1) / (357.6 / 4017.7)
=0.36905877 / 0.33486821
=1.1021

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 + 1284.9) / 5127.3) / (1 - (2182.7 + 1147.3) / 4349.7)
=0.21266554 / 0.23442996
=0.9072

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
=4017.7 / 3524.1
=1.1401

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))
=(106.7 / (106.7 + 1147.3)) / (135.4 / (135.4 + 1284.9))
=0.08508772 / 0.09533197
=0.8925

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)
=(511 / 4017.7) / (500.3 / 3524.1)
=0.1271872 / 0.14196532
=0.8959

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)
=((1153.7 + 1692.9) / 5127.3) / ((762.4 + 1268.9) / 4349.7)
=0.55518499 / 0.46699772
=1.1888

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
=(219.7 - -0.3 - 210.7) / 5127.3
=0.0018

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 -2.20 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.93970.98490.99550.99340.96921.20151.03191.00741.14211.2166
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 -2.49-2.70-2.62-2.64-2.39-2.45-2.70-2.41-2.26-2.33

FMC Corporation Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.96631.02111.08331.08681.15391.12791.14231.27841.16651.2048
GMI 0.97590.99070.97290.94920.94360.94820.99911.05251.09561.1021
AQI 1.04641.09621.08521.1921.00010.98090.98410.70440.90250.9072
SGI 1.11691.13371.09041.06081.00840.97441.02331.08131.09921.1401
DEPI 1.08081.05271.2091.05181.2431.33281.0291.1690.96330.8925
SGAI 0.97830.97361.00471.08331.06741.05841.00360.9380.93150.8959
LVGI 1.12551.13581.12611.03891.05261.01021.23491.2771.1331.1888
TATA -0.0166-0.0245-0.00570.01310.02840.0221-0.0013-0.0065-0.00930.0018
M-score -2.51-2.46-2.35-2.25-2.23-2.29-2.42-2.33-2.31-2.20
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