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FMC Corp (NYSE:FMC)
Beneish M-Score
-2.65 (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 Corp has a M-score of -2.65 suggests that the company is not a manipulator.

FMC' s Beneish M-Score Range Over the Past 10 Years
Min: -3.31   Max: -1.43
Current: -2.65

-3.31
-1.43

During the past 13 years, the highest Beneish M-Score of FMC Corp was -1.43. The lowest was -3.31. 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 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 * 0.9344+0.528 * 0.9582+0.404 * 1.1596+0.892 * 1.0157+0.115 * 0.8865
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.6359+4.679 * -0.0499-0.327 * 0.9548
=-2.65

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $1,603 Mil.
Revenue was 807.7 + 810.3 + 798.8 + 899.3 = $3,316 Mil.
Gross Profit was 279.5 + 301.3 + 281.4 + 298.6 = $1,161 Mil.
Total Current Assets was $2,804 Mil.
Total Assets was $6,210 Mil.
Property, Plant and Equipment(Net PPE) was $1,031 Mil.
Depreciation, Depletion and Amortization(DDA) was $125 Mil.
Selling, General & Admin. Expense(SGA) was $520 Mil.
Total Current Liabilities was $1,309 Mil.
Long-Term Debt was $1,913 Mil.
Net Income was 79.7 + 65.2 + 48.3 + -204.1 = $-11 Mil.
Non Operating Income was 0.4 + 0 + -41.6 + -0.2 = $-41 Mil.
Cash Flow from Operations was 163.3 + 124.2 + 100.3 + -47.2 = $341 Mil.
Accounts Receivable was $1,690 Mil.
Revenue was 830.7 + 887.1 + 659.4 + 887.8 = $3,265 Mil.
Gross Profit was 220.3 + 305.8 + 250.7 + 318.3 = $1,095 Mil.
Total Current Assets was $3,238 Mil.
Total Assets was $6,447 Mil.
Property, Plant and Equipment(Net PPE) was $1,083 Mil.
Depreciation, Depletion and Amortization(DDA) was $115 Mil.
Selling, General & Admin. Expense(SGA) was $806 Mil.
Total Current Liabilities was $1,455 Mil.
Long-Term Debt was $2,049 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)
=(1603.4 / 3316.1) / (1689.6 / 3265)
=0.4835198 / 0.51748851
=0.9344

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)
=(1095.1 / 3265) / (1160.8 / 3316.1)
=0.33540582 / 0.35004976
=0.9582

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 - (2804.1 + 1031) / 6209.8) / (1 - (3238.1 + 1082.8) / 6447)
=0.38241167 / 0.32978129
=1.1596

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
=3316.1 / 3265
=1.0157

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))
=(114.8 / (114.8 + 1082.8)) / (125 / (125 + 1031))
=0.09585838 / 0.10813149
=0.8865

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)
=(520.4 / 3316.1) / (805.8 / 3265)
=0.15693134 / 0.24679939
=0.6359

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)
=((1913.3 + 1308.8) / 6209.8) / ((2048.5 + 1455) / 6447)
=0.51887339 / 0.54343105
=0.9548

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
=(-10.9 - -41.4 - 340.6) / 6209.8
=-0.0499

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 Corp has a M-score of -2.65 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 local exchange's currency.

FMC Corp Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.99550.99340.96921.20151.03191.12071.02661.50571.03721.149
GMI 0.9870.99180.96841.00820.92620.93020.97460.96961.03231.1322
AQI 0.97590.93580.93911.051.0431.0421.1920.70441.37891.3465
SGI 1.09321.12231.18320.90721.10260.97431.1230.91811.04091.0055
DEPI 1.04190.91041.07151.00240.91761.38510.8481.64160.72090.8939
SGAI 0.96380.98610.90281.05481.15711.01291.07451.10341.14221.2443
LVGI 0.9550.94611.05410.91591.06791.03431.03891.26390.95430.9635
TATA -0.0464-0.04750.0036-0.024-0.0556-0.00430.0131-0.0068-0.01250.1339
M-score -2.61-2.62-2.36-2.45-2.70-2.40-2.26-2.29-2.34-1.54

FMC Corp Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 1.67151.76931.03720.92311.1070.90741.1491.0650.85010.9344
GMI 0.94670.88881.03231.03621.0951.1981.13221.14161.07920.9582
AQI 0.90720.90161.37890.96741.43341.55941.34651.85371.23091.1596
SGI 0.82170.75351.04091.06191.12351.1841.00551.08061.02631.0157
DEPI 1.47961.92140.72090.66350.69870.51910.89390.84740.73840.8865
SGAI 1.17031.3021.14221.48941.49771.36961.24430.67810.64950.6359
LVGI 1.18880.95720.95431.05351.02630.98620.96350.90230.93390.9548
TATA -0.00690.0073-0.02180.00010.10180.13350.13830.0917-0.0144-0.0499
M-score -2.16-1.99-2.38-2.63-1.70-1.56-1.52-1.43-2.47-2.65
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