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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.
During the past 13 years, the highest Beneish M-Score of FMC Technologies Inc was -1.70. The lowest was -3.03. And the median was -2.30.
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 Technologies Inc 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 * 0.8466||+||0.528 * 0.9946||+||0.404 * 0.9909||+||0.892 * 0.9052||+||0.115 * 0.9305|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0489||+||4.679 * -0.0516||-||0.327 * 0.9436|
|This Year (Sep15) TTM:||Last Year (Sep14) TTM:|
|Accounts Receivable was $1,739 Mil.|
Revenue was 1545 + 1695.2 + 1695.2 + 2156.2 = $7,092 Mil.
Gross Profit was 371.1 + 398.2 + 402.2 + 542.4 = $1,714 Mil.
Total Current Assets was $4,196 Mil.
Total Assets was $6,711 Mil.
Property, Plant and Equipment(Net PPE) was $1,396 Mil.
Depreciation, Depletion and Amortization(DDA) was $242 Mil.
Selling, General & Admin. Expense(SGA) was $691 Mil.
Total Current Liabilities was $2,371 Mil.
Long-Term Debt was $1,261 Mil.
Net Income was 82 + 107.9 + 147.6 + 168.6 = $506 Mil.
Non Operating Income was -12.7 + -15.1 + -6.3 + -24.8 = $-59 Mil.
Cash Flow from Operations was 266.4 + 60.1 + 175.6 + 409.2 = $911 Mil.
|Accounts Receivable was $2,269 Mil.
Revenue was 1976.7 + 1985.3 + 1824.4 + 2047.8 = $7,834 Mil.
Gross Profit was 497.1 + 477.7 + 420.9 + 487.5 = $1,883 Mil.
Total Current Assets was $4,403 Mil.
Total Assets was $7,034 Mil.
Property, Plant and Equipment(Net PPE) was $1,447 Mil.
Depreciation, Depletion and Amortization(DDA) was $230 Mil.
Selling, General & Admin. Expense(SGA) was $728 Mil.
Total Current Liabilities was $2,698 Mil.
Long-Term Debt was $1,337 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(1738.6 / 7091.6)||/||(2268.8 / 7834.2)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(398.2 / 7834.2)||/||(371.1 / 7091.6)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (4195.6 + 1396.3) / 6711.2)||/||(1 - (4403.4 + 1447) / 7034.4)|
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.
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))|
|=||(230.2 / (230.2 + 1447))||/||(241.6 / (241.6 + 1396.3))|
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)|
|=||(691.2 / 7091.6)||/||(728 / 7834.2)|
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)|
|=||((1261.2 + 2371.4) / 6711.2)||/||((1337 + 2698.1) / 7034.4)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(506.1 - -58.9||-||911.3)||/||6711.2|
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 Technologies Inc has a M-score of -2.95 suggests that the company will not be a manipulator.
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
FMC Technologies Inc Annual Data
FMC Technologies Inc Quarterly Data