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FMC Corporation (NYSE:FMC)
Beneish M-Score
-2.11 (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 -2.11 signals that the company is a manipulator.

FMC' s 10-Year Beneish M-Score Range
Min: -3.21   Max: -0.61
Current: -2.11

-3.21
-0.61

During the past 13 years, the highest Beneish M-Score of FMC Corporation was -0.61. The lowest was -3.21. 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 * 1.2778+0.528 * 1.0379+0.404 * 0.9016+0.892 * 1.0433+0.115 * 1.06
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9521+4.679 * 0.0146-0.327 * 0.9572
=-2.11

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $1,573 Mil.
Revenue was 1015.9 + 987.8 + 941.8 + 1130.7 = $4,076 Mil.
Gross Profit was 323.7 + 357.6 + 328.5 + 354.9 = $1,365 Mil.
Total Current Assets was $2,857 Mil.
Total Assets was $5,251 Mil.
Property, Plant and Equipment(Net PPE) was $1,283 Mil.
Depreciation, Depletion and Amortization(DDA) was $134 Mil.
Selling, General & Admin. Expense(SGA) was $534 Mil.
Total Current Liabilities was $1,742 Mil.
Long-Term Debt was $1,152 Mil.
Net Income was 56.3 + 109.1 + 65.6 + 27.1 = $258 Mil.
Non Operating Income was 0.4 + 0.2 + 0 + -0.4 = $0 Mil.
Cash Flow from Operations was 86.6 + 211.9 + -96.8 + -20.5 = $181 Mil.
Accounts Receivable was $1,180 Mil.
Revenue was 957.4 + 959.4 + 990.2 + 1000 = $3,907 Mil.
Gross Profit was 304.4 + 342.9 + 369.7 + 340.6 = $1,358 Mil.
Total Current Assets was $2,611 Mil.
Total Assets was $4,931 Mil.
Property, Plant and Equipment(Net PPE) was $1,164 Mil.
Depreciation, Depletion and Amortization(DDA) was $129 Mil.
Selling, General & Admin. Expense(SGA) was $537 Mil.
Total Current Liabilities was $2,067 Mil.
Long-Term Debt was $772 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)
=(1572.6 / 4076.2) / (1179.6 / 3907)
=0.3858005 / 0.30191963
=1.2778

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)
=(357.6 / 3907) / (323.7 / 4076.2)
=0.34747888 / 0.33479711
=1.0379

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 - (2857.3 + 1283.3) / 5251.1) / (1 - (2610.7 + 1163.5) / 4930.8)
=0.2114795 / 0.2345664
=0.9016

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
=4076.2 / 3907
=1.0433

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))
=(129.1 / (129.1 + 1163.5)) / (133.5 / (133.5 + 1283.3))
=0.09987622 / 0.09422643
=1.06

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)
=(533.5 / 4076.2) / (537.1 / 3907)
=0.1308817 / 0.13747121
=0.9521

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)
=((1151.9 + 1741.5) / 5251.1) / ((771.8 + 2066.5) / 4930.8)
=0.55100836 / 0.57562667
=0.9572

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
=(258.1 - 0.2 - 181.2) / 5251.1
=0.0146

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 -2.11 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 0.93970.9830.9970.99380.96921.20151.03191.00741.08811.2769
GMI 0.96380.93820.99040.99280.96841.00820.92620.97560.96591.0344
AQI 1.09110.90470.97360.94210.93911.051.0431.0421.01850.8244
SGI 1.06761.04831.09151.12181.18320.90721.10261.08391.10971.0337
DEPI 0.9230.90791.04190.91041.07151.00240.91761.11681.05121.1696
SGAI 1.00751.01240.96530.98650.90281.05481.15710.99281.07350.9466
LVGI 0.88580.85980.94550.95571.05410.91591.06791.02751.04581.277
TATA -0.0128-0.0437-0.0491-0.051-0.002-0.024-0.0556-0.00480.013-0.0065
M-score -2.49-2.70-2.62-2.64-2.39-2.45-2.70-2.41-2.27-2.34

FMC Corporation Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 1.02111.05951.08811.07961.03191.0941.22541.22071.31691.2778
GMI 0.99070.98140.96590.96950.98491.01811.05311.07641.06111.0379
AQI 1.09621.08521.01851.00010.98090.98410.82440.90250.90720.9016
SGI 1.13371.1151.10971.07781.06511.06841.07721.05041.0431.0433
DEPI 1.05271.07921.05121.02391.04881.10351.16961.21211.22051.06
SGAI 0.97361.00031.07351.05451.04481.00120.94520.94390.90760.9521
LVGI 1.13581.12611.04581.05261.01021.23491.2771.1331.18880.9572
TATA -0.0245-0.00560.0130.02810.0219-0.0016-0.0066-0.00930.00180.0146
M-score -2.46-2.36-2.27-2.25-2.31-2.40-2.34-2.28-2.17-2.11
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