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FMC Corporation (NYSE:FMC)
Beneish M-Score
-2.37 (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 -2.37 suggests that the company is not a manipulator.

FMC' s 10-Year Beneish M-Score Range
Min: -3.15   Max: -2.03
Current: -2.37

-3.15
-2.03

During the past 13 years, the highest Beneish M-Score of FMC Corporation was -2.03. The lowest was -3.15. 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 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 * 1.1321+0.528 * 1.0158+0.404 * 1.0327+0.892 * 1.042+0.115 * 1.0148
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1558+4.679 * -0.0122-0.327 * 0.9563
=-2.37

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $1,751 Mil.
Revenue was 1092.2 + 1015.9 + 987.8 + 941.8 = $4,038 Mil.
Gross Profit was 365.2 + 323.7 + 357.6 + 328.5 = $1,375 Mil.
Total Current Assets was $2,934 Mil.
Total Assets was $5,341 Mil.
Property, Plant and Equipment(Net PPE) was $1,309 Mil.
Depreciation, Depletion and Amortization(DDA) was $131 Mil.
Selling, General & Admin. Expense(SGA) was $621 Mil.
Total Current Liabilities was $1,910 Mil.
Long-Term Debt was $1,153 Mil.
Net Income was 76.5 + 56.3 + 109.1 + 65.6 = $308 Mil.
Non Operating Income was -1.5 + 0.4 + 0.2 + 0 = $-1 Mil.
Cash Flow from Operations was 172 + 86.6 + 211.9 + -96.8 = $374 Mil.
Accounts Receivable was $1,484 Mil.
Revenue was 1130.7 + 957.4 + 876 + 910.7 = $3,875 Mil.
Gross Profit was 354.9 + 304.4 + 327.5 + 353.6 = $1,340 Mil.
Total Current Assets was $2,945 Mil.
Total Assets was $5,235 Mil.
Property, Plant and Equipment(Net PPE) was $1,248 Mil.
Depreciation, Depletion and Amortization(DDA) was $127 Mil.
Selling, General & Admin. Expense(SGA) was $516 Mil.
Total Current Liabilities was $1,987 Mil.
Long-Term Debt was $1,154 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)
=(1751 / 4037.7) / (1484.3 / 3874.8)
=0.43366273 / 0.38306493
=1.1321

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)
=(323.7 / 3874.8) / (365.2 / 4037.7)
=0.34592753 / 0.34054041
=1.0158

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 - (2934.4 + 1308.5) / 5340.5) / (1 - (2945 + 1248.3) / 5235.2)
=0.20552383 / 0.19901818
=1.0327

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
=4037.7 / 3874.8
=1.042

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))
=(127.2 / (127.2 + 1248.3)) / (131.2 / (131.2 + 1308.5))
=0.09247546 / 0.0911301
=1.0148

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)
=(621.2 / 4037.7) / (515.8 / 3874.8)
=0.15384996 / 0.13311655
=1.1558

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)
=((1153.4 + 1910.4) / 5340.5) / ((1154.1 + 1986.7) / 5235.2)
=0.5736916 / 0.59993888
=0.9563

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
=(307.5 - -0.9 - 373.7) / 5340.5
=-0.0122

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 -2.37 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.98490.99550.99340.96921.20151.03191.00741.14211.21661.1321
GMI 0.94250.9870.99180.96841.00820.92620.97560.92921.07521.0158
AQI 0.90870.97590.93580.93911.051.0431.0421.1920.70441.0327
SGI 1.04621.09321.12231.18320.90721.10261.08391.00951.13631.042
DEPI 0.90791.04190.91041.07151.00240.91761.11681.05181.1691.0148
SGAI 1.01430.96380.98610.90281.05481.15710.99281.09630.92691.1558
LVGI 0.85980.9550.94611.05410.91591.06791.03431.03891.26390.9563
TATA -0.0447-0.0493-0.051-0.002-0.024-0.0556-0.00480.0131-0.0065-0.0122
M-score -2.70-2.62-2.64-2.39-2.45-2.70-2.41-2.26-2.32-2.37

FMC Corporation Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 1.08331.08681.15391.12791.14231.27841.16651.20481.19691.1321
GMI 0.97290.94920.94360.94820.99911.05251.09561.10211.06671.0158
AQI 1.08521.1921.00010.98090.98410.70440.90250.90720.90161.0327
SGI 1.09041.06081.00840.97441.02331.08131.09921.14011.11381.042
DEPI 1.2091.05181.2431.33281.0291.1690.96330.89251.01471.0148
SGAI 1.00471.08331.06741.05841.00360.9380.93150.89590.94571.1558
LVGI 1.12611.03891.05261.01021.23491.26391.1331.18880.95720.9563
TATA -0.00570.01310.02840.0221-0.0014-0.0064-0.00920.0020.0148-0.0122
M-score -2.35-2.25-2.23-2.29-2.42-2.33-2.31-2.20-2.11-2.37
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