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FMC Technologies, Inc. (NYSE:FTI)
Beneish M-Score
-2.60 (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 Technologies, Inc. has a M-score of -2.60 suggests that the company is not a manipulator.

FTI' s 10-Year Beneish M-Score Range
Min: -3.03   Max: -1.85
Current: -2.6

-3.03
-1.85

During the past 13 years, the highest Beneish M-Score of FMC Technologies, Inc. was -1.85. The lowest was -3.03. And the median was -2.18.


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 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 * 1.0078+0.528 * 0.9824+0.404 * 0.9412+0.892 * 1.1585+0.115 * 0.7817
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0048+4.679 * -0.0453-0.327 * 0.9927
=-2.60

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $2,082 Mil.
Revenue was 2047.8 + 1724.5 + 1707.9 + 1646 = $7,126 Mil.
Gross Profit was 487.5 + 370.7 + 357.8 + 338.8 = $1,555 Mil.
Total Current Assets was $4,023 Mil.
Total Assets was $6,606 Mil.
Property, Plant and Equipment(Net PPE) was $1,349 Mil.
Depreciation, Depletion and Amortization(DDA) was $210 Mil.
Selling, General & Admin. Expense(SGA) was $695 Mil.
Total Current Liabilities was $2,615 Mil.
Long-Term Debt was $1,330 Mil.
Net Income was 177.8 + 116 + 105.2 + 102.4 = $501 Mil.
Non Operating Income was 4.3 + -0.2 + 0.2 + 1 = $5 Mil.
Cash Flow from Operations was 370.2 + 153.6 + 305.4 + -33.8 = $795 Mil.
Accounts Receivable was $1,783 Mil.
Revenue was 1840.9 + 1419 + 1494.9 + 1396.6 = $6,151 Mil.
Gross Profit was 391.1 + 319.9 + 314.6 + 292.9 = $1,319 Mil.
Total Current Assets was $3,488 Mil.
Total Assets was $5,903 Mil.
Property, Plant and Equipment(Net PPE) was $1,244 Mil.
Depreciation, Depletion and Amortization(DDA) was $146 Mil.
Selling, General & Admin. Expense(SGA) was $597 Mil.
Total Current Liabilities was $1,970 Mil.
Long-Term Debt was $1,580 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)
=(2081.8 / 7126.2) / (1783.1 / 6151.4)
=0.29213325 / 0.28986897
=1.0078

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)
=(370.7 / 6151.4) / (487.5 / 7126.2)
=0.21434145 / 0.2181808
=0.9824

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 - (4023 + 1349.1) / 6605.6) / (1 - (3488.3 + 1243.5) / 5902.9)
=0.1867355 / 0.19839401
=0.9412

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
=7126.2 / 6151.4
=1.1585

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))
=(146.2 / (146.2 + 1243.5)) / (209.8 / (209.8 + 1349.1))
=0.10520256 / 0.13458208
=0.7817

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)
=(694.8 / 7126.2) / (596.9 / 6151.4)
=0.09749937 / 0.09703482
=1.0048

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)
=((1329.8 + 2614.7) / 6605.6) / ((1580.4 + 1970.4) / 5902.9)
=0.59714485 / 0.60153484
=0.9927

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
=(501.4 - 5.3 - 795.4) / 6605.6
=-0.0453

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 -2.60 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 Technologies, Inc. Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.12320.86441.04440.70281.30230.91181.34010.99931.08461.0078
GMI 0.99871.04530.94980.96691.02280.92510.86461.14731.03650.9824
AQI 0.89050.81890.94941.0331.241.09810.95310.88451.18480.9412
SGI 1.09911.22531.20881.22890.9860.9680.93651.23591.20641.1585
DEPI 0.93391.03321.13540.87031.22680.92840.96621.15851.17010.7817
SGAI 0.95810.87840.94190.91210.78881.14411.18430.89881.0311.0048
LVGI 0.9361.02490.91351.06561.1170.87350.8531.04841.13230.9927
TATA -0.00160.05340.0493-0.09220.0373-0.06470.05080.05540.0455-0.0453
M-score -2.31-2.19-2.02-3.01-1.91-2.88-2.06-1.96-1.94-2.60

FMC Technologies, Inc. Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 1.11340.99930.90031.0041.03521.08461.2080.98151.03211.0078
GMI 1.06541.14731.11571.0871.09391.03651.02821.0141.01120.9824
AQI 0.82740.88450.89251.09351.10081.18481.18490.98371.04090.9412
SGI 1.12391.23591.30221.29841.2361.20641.18231.16461.19071.1585
DEPI 1.2211.15851.13171.07751.09891.17011.0120.94540.87310.7817
SGAI 0.97290.89880.86630.87820.99641.0311.06631.08591.0011.0048
LVGI 0.96431.04841.07221.18441.13461.13231.12471.0241.00270.9927
TATA 0.05350.05540.06590.09610.06260.04550.0511-0.0158-0.0194-0.0453
M-score -2.01-1.96-1.96-1.71-1.89-1.94-1.85-2.45-2.36-2.60
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