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FMC Technologies Inc (NYSE:FTI)
Beneish M-Score
-2.51 (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 -2.51 suggests that the company is not a manipulator.

FTI' s 10-Year Beneish M-Score Range
Min: -3.61   Max: -1.36
Current: -2.51

-3.61
-1.36

During the past 13 years, the highest Beneish M-Score of FMC Technologies Inc was -1.36. The lowest was -3.61. And the median was -2.25.


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 * 1.0215+0.528 * 0.9186+0.404 * 0.9326+0.892 * 1.1464+0.115 * 0.938
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9508+4.679 * -0.0283-0.327 * 0.9296
=-2.51

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $2,139 Mil.
Revenue was 1985.3 + 1824.4 + 2047.8 + 1724.5 = $7,582 Mil.
Gross Profit was 477.5 + 420.9 + 487.5 + 370.7 = $1,757 Mil.
Total Current Assets was $4,102 Mil.
Total Assets was $6,754 Mil.
Property, Plant and Equipment(Net PPE) was $1,444 Mil.
Depreciation, Depletion and Amortization(DDA) was $221 Mil.
Selling, General & Admin. Expense(SGA) was $723 Mil.
Total Current Liabilities was $2,505 Mil.
Long-Term Debt was $1,289 Mil.
Net Income was 226.3 + 135.2 + 177.8 + 116 = $655 Mil.
Non Operating Income was 84 + -1.1 + 4.3 + -0.2 = $87 Mil.
Cash Flow from Operations was 184 + 51.8 + 370.2 + 153.6 = $760 Mil.
Accounts Receivable was $1,826 Mil.
Revenue was 1707.9 + 1646 + 1840.9 + 1419 = $6,614 Mil.
Gross Profit was 357.8 + 338.8 + 391.1 + 319.9 = $1,408 Mil.
Total Current Assets was $3,666 Mil.
Total Assets was $6,117 Mil.
Property, Plant and Equipment(Net PPE) was $1,277 Mil.
Depreciation, Depletion and Amortization(DDA) was $182 Mil.
Selling, General & Admin. Expense(SGA) was $663 Mil.
Total Current Liabilities was $2,197 Mil.
Long-Term Debt was $1,498 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)
=(2138.8 / 7582) / (1826.4 / 6613.8)
=0.28208916 / 0.27614987
=1.0215

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)
=(420.9 / 6613.8) / (477.5 / 7582)
=0.21282772 / 0.2316803
=0.9186

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 - (4102 + 1444.1) / 6754) / (1 - (3666.3 + 1277.3) / 6116.5)
=0.17884217 / 0.19175999
=0.9326

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
=7582 / 6613.8
=1.1464

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))
=(181.8 / (181.8 + 1277.3)) / (221.2 / (221.2 + 1444.1))
=0.12459735 / 0.13282892
=0.938

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)
=(723.1 / 7582) / (663.4 / 6613.8)
=0.09537061 / 0.10030542
=0.9508

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)
=((1289 + 2504.5) / 6754) / ((1498.4 + 2197.3) / 6116.5)
=0.56166716 / 0.6042181
=0.9296

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
=(655.3 - 87 - 759.6) / 6754
=-0.0283

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 -2.51 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 1.12320.86441.04440.70281.30230.91181.34010.98381.10171.0078
GMI 0.99871.04530.94980.96691.02281.69430.47212.3110.51460.9824
AQI 0.89050.81890.94941.0331.241.10590.94640.88451.18480.9412
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 0.9361.02490.91351.06561.1170.86730.8591.04841.13230.9927
TATA -0.00160.05340.0493-0.09220.0373-0.06630.05080.05540.0455-0.0453
M-score -2.31-2.19-2.02-3.01-1.91-2.48-2.28-1.36-2.20-2.60

FMC Technologies Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.94071.03651.05321.10171.2080.98151.03211.00781.02591.0215
GMI 1.54041.06130.79850.51460.64810.76540.87510.98240.95120.9186
AQI 0.89251.09351.10081.18481.18490.98371.04090.94120.93040.9326
SGI 1.30221.29841.2361.20641.18231.16461.19071.15851.14121.1464
DEPI 1.13171.07751.09891.17011.0120.94540.87310.78170.86730.938
SGAI 0.86630.87820.99641.0311.06631.08591.0011.00480.98080.9508
LVGI 1.07221.18441.13461.13231.12471.0241.00270.99270.98460.9296
TATA 0.06590.09610.06260.04550.0511-0.0158-0.0194-0.0453-0.052-0.0283
M-score -1.70-1.69-2.03-2.20-2.05-2.58-2.44-2.60-2.63-2.51
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