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GuruFocus has detected 2 Warning Signs with TechnipFMC PLC $FTI.
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TechnipFMC PLC (NYSE:FTI)
Beneish M-Score
0.00 (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.

TechnipFMC PLC has a M-score of -2.68 suggests that the company is not a manipulator.

During the past 13 years, the highest Beneish M-Score of TechnipFMC PLC was 0.00. The lowest was -3.34. And the median was -2.63.


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 TechnipFMC PLC 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+0.528 * 0.7504+0.404 * 1.019+0.892 * 0.8617+0.115 * 1.2815
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0165+4.679 * 0.0024-0.327 * 0.9754
=-2.68

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $0 Mil.
Revenue was 3275.22 + 3128.886 + 3130.355 + 1073.698 = $10,608 Mil.
Gross Profit was 476.351 + 461.063 + 440.636 + 388.549 = $1,767 Mil.
Total Current Assets was $9,743 Mil.
Total Assets was $17,315 Mil.
Property, Plant and Equipment(Net PPE) was $7,042 Mil.
Depreciation, Depletion and Amortization(DDA) was $304 Mil.
Selling, General & Admin. Expense(SGA) was $605 Mil.
Total Current Liabilities was $9,683 Mil.
Long-Term Debt was $1,751 Mil.
Net Income was 206.763 + 137.151 + 129.652 + 113.332 = $587 Mil.
Non Operating Income was 4.6 + 0 + 0 + -52.471 = $-48 Mil.
Cash Flow from Operations was -218.145 + 488.921 + 93.386 + 228.879 = $593 Mil.
Accounts Receivable was $0 Mil.
Revenue was 3498.138 + 3475.179 + 3122.381 + 2214.712 = $12,310 Mil.
Gross Profit was 513.992 + 299.02 + 363.861 + 361.414 = $1,538 Mil.
Total Current Assets was $9,296 Mil.
Total Assets was $17,056 Mil.
Property, Plant and Equipment(Net PPE) was $7,249 Mil.
Depreciation, Depletion and Amortization(DDA) was $406 Mil.
Selling, General & Admin. Expense(SGA) was $691 Mil.
Total Current Liabilities was $9,704 Mil.
Long-Term Debt was $1,842 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)
=(0 / 10608.159) / (0 / 12310.41)
=0 / 0
=1

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)
=(1538.287 / 12310.41) / (1766.599 / 10608.159)
=0.12495823 / 0.1665321
=0.7504

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 - (9743.201 + 7042.497) / 17315.114) / (1 - (9295.512 + 7248.546) / 17055.799)
=0.03057537 / 0.03000393
=1.019

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
=10608.159 / 12310.41
=0.8617

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))
=(406.245 / (406.245 + 7248.546)) / (304.253 / (304.253 + 7042.497))
=0.05307068 / 0.04141328
=1.2815

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)
=(605.171 / 10608.159) / (690.871 / 12310.41)
=0.05704769 / 0.05612088
=1.0165

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)
=((1751.032 + 9682.956) / 17315.114) / ((1842.404 + 9704.297) / 17055.799)
=0.66034726 / 0.67699561
=0.9754

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
=(586.898 - -47.871 - 593.041) / 17315.114
=0.0024

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.

TechnipFMC PLC has a M-score of -2.68 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 local exchange's currency.

TechnipFMC PLC Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.86850.95371.39891.29990.67930.82611.30280.8552
GMI 1.28590.53390.86130.90791.03170.99851.05461.231
AQI 0.99050.99540.97440.92591.10031.12320.85241.042
SGI 1.25780.90580.88810.87451.10671.24351.09761.0027
DEPI 1.0480.99821.05321.75511.24030.87010.98440.8326
SGAI 0.87161.22621.19511.20770.95911.08460.98260.7934
LVGI 1.0470.95550.99071.00780.99030.92311.04471.0111
TATA -0.0867-0.0042-0.05470.0371-0.01220.0086-0.04540.0264
M-score -1.70-2.90-2.58-2.17-2.64-2.34-2.37-2.34

TechnipFMC PLC Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 10.8042111111
GMI 1.17471.23341.13391.28211.22470.98680.74690.7504
AQI 0.84031.0421.30131.43911.41741.06451.0421.019
SGI 1.09061.06610.97580.93710.90670.89490.87370.8617
DEPI 0.84940.83260.82650.80070.74830.91221.14811.2815
SGAI 0.8560.79340.79950.7880.82590.97361.02121.0165
LVGI 1.0591.01111.0791.08941.03260.98090.96120.9754
TATA -0.0450.0277-0.0137-0.01320.0008-0.0029-0.01130.0024
M-score -2.59-2.32-2.38-2.29-2.28-2.57-2.74-2.68
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