Switch to:
3M Co (FRA:MMM)
Beneish M-Score
-2.69 (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.

3M Co has a M-score of -2.74 suggests that the company is not a manipulator.

FRA:MMM' s Beneish M-Score Range Over the Past 10 Years
Min: -3.29   Max: -2.33
Current: -2.69

-3.29
-2.33

During the past 13 years, the highest Beneish M-Score of 3M Co was -2.33. The lowest was -3.29. And the median was -2.65.


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 3M Co 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 * 0.9337+0.528 * 0.9845+0.404 * 1.2742+0.892 * 1.0591+0.115 * 0.8913
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0004+4.679 * -0.0521-0.327 * 1.2965
=-2.74

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was €4,027 Mil.
Revenue was 6653.19683908 + 6699.71541357 + 6871.60295821 + 6848.43624699 = €27,073 Mil.
Gross Profit was 3350.39511494 + 3186.45001377 + 3417.08990466 + 3410.85271318 = €13,365 Mil.
Total Current Assets was €9,765 Mil.
Total Assets was €29,617 Mil.
Property, Plant and Equipment(Net PPE) was €7,735 Mil.
Depreciation, Depletion and Amortization(DDA) was €1,307 Mil.
Selling, General & Admin. Expense(SGA) was €5,497 Mil.
Total Current Liabilities was €6,446 Mil.
Long-Term Debt was €8,016 Mil.
Net Income was 1144.93534483 + 952.905535665 + 1154.77145148 + 1158.3355609 = €4,411 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = €0 Mil.
Cash Flow from Operations was 1131.46551724 + 2146.33250711 + 1482.66951795 + 1192.19460037 = €5,953 Mil.
Accounts Receivable was €4,073 Mil.
Revenue was 7001.75552065 + 6260.3406326 + 6314.11499961 + 5986.60484286 = €25,563 Mil.
Gross Profit was 3471.31109674 + 2994.32278994 + 3051.13680453 + 2907.19069699 = €12,424 Mil.
Total Current Assets was €11,566 Mil.
Total Assets was €28,313 Mil.
Property, Plant and Equipment(Net PPE) was €7,656 Mil.
Depreciation, Depletion and Amortization(DDA) was €1,132 Mil.
Selling, General & Admin. Expense(SGA) was €5,189 Mil.
Total Current Liabilities was €4,696 Mil.
Long-Term Debt was €5,968 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)
=(4027.47844828 / 27072.9514579) / (4072.80790908 / 25562.8159957)
=0.14876392 / 0.15932548
=0.9337

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)
=(3186.45001377 / 25562.8159957) / (3350.39511494 / 27072.9514579)
=0.48601693 / 0.49365832
=0.9845

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 - (9764.72701149 + 7735.27298851) / 29617.4568966) / (1 - (11566.1092119 + 7655.91795251) / 28312.8522591)
=0.40913225 / 0.32108475
=1.2742

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
=27072.9514579 / 25562.8159957
=1.0591

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))
=(1132.1610284 / (1132.1610284 + 7655.91795251)) / (1306.96626554 / (1306.96626554 + 7735.27298851))
=0.12882918 / 0.14454011
=0.8913

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)
=(5496.97700036 / 27072.9514579) / (5188.53797501 / 25562.8159957)
=0.20304314 / 0.20297208
=1.0004

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)
=((8016.3433908 + 6445.76149425) / 29617.4568966) / ((5967.84625335 + 4695.55576088) / 28312.8522591)
=0.48829665 / 0.37662761
=1.2965

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
=(4410.94789288 - 0 - 5952.66214268) / 29617.4568966
=-0.0521

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.

3M Co has a M-score of -2.74 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.

3M Co Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.00931.01560.921.11160.96470.96321.03991.01450.96671.0303
GMI 1.0421.02011.01880.98790.98981.02390.98850.99420.98990.9822
AQI 0.79321.10771.07720.96141.0191.04760.94591.0350.97151.1468
SGI 0.97240.96851.11260.84831.27061.11651.01260.98761.14671.0769
DEPI 0.97031.10280.97651.01121.06370.96041.0420.97420.96150.9864
SGAI 1.03150.92771.01251.02240.96841.0140.97931.01340.98311.0045
LVGI 1.23170.96611.12080.86420.92730.92051.04361.07241.15481.1896
TATA 0.0006-0.0072-0.0416-0.0641-0.0361-0.0317-0.0253-0.0345-0.0534-0.0485
M-score -2.64-2.44-2.65-2.79-2.40-2.51-2.58-2.66-2.70-2.62

3M Co Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 0.99770.98991.02271.05551.06251.10161.01790.97780.98010.9337
GMI 0.99430.99160.98760.98420.99030.98680.98210.9790.98220.9845
AQI 1.0351.03991.0281.00130.97150.88620.85641.12011.14681.2742
SGI 1.00430.98460.99481.00661.04331.11221.14411.14911.1321.0591
DEPI 0.96070.97060.9961.01481.04241.09441.02460.98570.94450.8913
SGAI 1.01371.01270.99990.98480.98290.98130.98690.99821.0051.0004
LVGI 1.07241.1131.10721.20821.15481.06611.18411.221.18961.2965
TATA -0.0348-0.0359-0.0312-0.0455-0.0521-0.0458-0.0377-0.036-0.0481-0.0521
M-score -2.66-2.70-2.64-2.71-2.69-2.56-2.63-2.57-2.62-2.74
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
FEEDBACK