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FMC Corp (NYSE:FMC)
Beneish M-Score
-1.60 (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 -1.60 signals that the company is a manipulator.

FMC' s Beneish M-Score Range Over the Past 10 Years
Min: -3.31   Max: -1.6
Current: -1.6

-3.31
-1.6

During the past 13 years, the highest Beneish M-Score of FMC Corp was -1.60. The lowest was -3.31. And the median was -2.49.


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 * 1.149+0.528 * 1.1322+0.404 * 1.3465+0.892 * 1.0055+0.115 * 0.8939
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2443+4.679 * 0.1216-0.327 * 0.9635
=-1.60

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $1,851 Mil.
Revenue was 899.3 + 830.7 + 887.1 + 659.4 = $3,277 Mil.
Gross Profit was 298.6 + 220.3 + 305.8 + 250.7 = $1,075 Mil.
Total Current Assets was $2,972 Mil.
Total Assets was $6,326 Mil.
Property, Plant and Equipment(Net PPE) was $1,016 Mil.
Depreciation, Depletion and Amortization(DDA) was $116 Mil.
Selling, General & Admin. Expense(SGA) was $738 Mil.
Total Current Liabilities was $1,453 Mil.
Long-Term Debt was $2,036 Mil.
Net Income was -204.1 + -2.4 + 742.3 + -46.8 = $489 Mil.
Non Operating Income was 117.6 + -40.4 + 0.1 + -0.1 = $77 Mil.
Cash Flow from Operations was -47.2 + -137.9 + 124.6 + -297.2 = $-358 Mil.
Accounts Receivable was $1,603 Mil.
Revenue was 887.8 + 819.1 + 794.9 + 756.9 = $3,259 Mil.
Gross Profit was 318.3 + 283.5 + 316.1 + 293 = $1,211 Mil.
Total Current Assets was $2,934 Mil.
Total Assets was $5,326 Mil.
Property, Plant and Equipment(Net PPE) was $930 Mil.
Depreciation, Depletion and Amortization(DDA) was $94 Mil.
Selling, General & Admin. Expense(SGA) was $590 Mil.
Total Current Liabilities was $1,910 Mil.
Long-Term Debt was $1,139 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)
=(1851.4 / 3276.5) / (1602.5 / 3258.7)
=0.56505417 / 0.49176052
=1.149

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)
=(220.3 / 3258.7) / (298.6 / 3276.5)
=0.3715899 / 0.32821608
=1.1322

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 - (2971.9 + 1016.4) / 6325.9) / (1 - (2934.4 + 930) / 5326)
=0.36952845 / 0.27442734
=1.3465

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
=3276.5 / 3258.7
=1.0055

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))
=(93.5 / (93.5 + 930)) / (115.7 / (115.7 + 1016.4))
=0.0913532 / 0.10219945
=0.8939

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)
=(737.9 / 3276.5) / (589.8 / 3258.7)
=0.22520983 / 0.18099242
=1.2443

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)
=((2036.3 + 1453.3) / 6325.9) / ((1138.9 + 1910.4) / 5326)
=0.55163692 / 0.57253098
=0.9635

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
=(489 - 77.2 - -357.7) / 6325.9
=0.1216

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 -1.60 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 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

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 1.03321.58231.53051.67151.76931.03720.92311.1070.90741.149
GMI 1.04680.94910.96310.94670.88881.03231.03621.0951.1981.1322
AQI 0.98410.70440.90250.90720.90161.37890.96741.43341.55941.3465
SGI 1.13130.87370.83780.82170.75351.04091.06191.12351.1841.0055
DEPI 0.80981.64161.47041.47961.92140.72090.66350.69870.51910.8939
SGAI 0.98071.11671.16391.17031.3021.14221.48941.49771.36961.2443
LVGI 1.23491.26391.1331.18880.95720.95431.05351.02630.98620.9635
TATA 0.0072-0.0108-0.0138-0.00690.0073-0.0218-0.00520.09780.13550.1216
M-score -2.38-2.29-2.28-2.16-1.99-2.38-2.65-1.72-1.55-1.60
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