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FMC Technologies Inc (NYSE:FTI)
Beneish M-Score
-2.65 (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 -2.65 suggests that the company is not a manipulator.

FTI' s 10-Year Beneish M-Score Range
Min: -3.03   Max: -1.85
Current: -2.65

-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 -2.24.


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 * 0.9232+0.528 * 0.892+0.404 * 0.9559+0.892 * 1.1146+0.115 * 0.9788
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9693+4.679 * -0.0311-0.327 * 0.9524
=-2.65

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $2,127 Mil.
Revenue was 2156.2 + 1976.7 + 1985.3 + 1824.4 = $7,943 Mil.
Gross Profit was 547.3 + 497.1 + 477.5 + 420.9 = $1,943 Mil.
Total Current Assets was $4,436 Mil.
Total Assets was $7,176 Mil.
Property, Plant and Equipment(Net PPE) was $1,458 Mil.
Depreciation, Depletion and Amortization(DDA) was $233 Mil.
Selling, General & Admin. Expense(SGA) was $751 Mil.
Total Current Liabilities was $2,784 Mil.
Long-Term Debt was $1,297 Mil.
Net Income was 168.6 + 169.8 + 226.3 + 135.2 = $700 Mil.
Non Operating Income was -24.8 + -27.8 + 84 + -1.1 = $30 Mil.
Cash Flow from Operations was 409.2 + 247.5 + 184 + 51.8 = $893 Mil.
Accounts Receivable was $2,067 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.



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)
=(2127 / 7942.6) / (2067.2 / 7126.2)
=0.26779644 / 0.29008448
=0.9232

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)
=(497.1 / 7126.2) / (547.3 / 7942.6)
=0.2181808 / 0.24460504
=0.892

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 - (4436.4 + 1458.4) / 7175.6) / (1 - (4023 + 1349.1) / 6605.6)
=0.17849378 / 0.1867355
=0.9559

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
=7942.6 / 7126.2
=1.1146

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))
=(209.8 / (209.8 + 1349.1)) / (232.5 / (232.5 + 1458.4))
=0.13458208 / 0.13750074
=0.9788

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)
=(750.6 / 7942.6) / (694.8 / 7126.2)
=0.09450306 / 0.09749937
=0.9693

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)
=((1297.2 + 2783.6) / 7175.6) / ((1329.8 + 2614.7) / 6605.6)
=0.56870506 / 0.59714485
=0.9524

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
=(699.9 - 30.3 - 892.5) / 7175.6
=-0.0311

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 -2.65 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.86441.04440.70281.30230.91181.34010.98381.09081.01070.9232
GMI 1.04530.94980.96691.02280.92510.86461.14731.03650.98240.892
AQI 0.81890.94941.0331.241.09810.95310.88451.18480.94120.9559
SGI 1.22531.20881.22890.9860.9680.93651.23591.20641.15851.1146
DEPI 1.03321.13540.87031.22680.92840.96621.15851.17010.78170.9788
SGAI 0.87840.94190.91210.78881.14411.18430.89881.0311.00480.9693
LVGI 1.02490.91351.06561.1170.87350.8531.04841.13230.99270.9524
TATA 0.05340.0493-0.09220.0373-0.06470.05080.05540.0455-0.0453-0.0311
M-score -2.19-2.02-3.01-1.91-2.88-2.06-1.97-1.93-2.60-2.65

FMC Technologies Inc Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 1.02511.09081.19960.96481.03051.01071.04131.05041.04450.9232
GMI 1.09391.03651.02821.0141.01120.98240.95120.91860.87690.892
AQI 1.10081.18481.18490.98371.04090.94120.93040.93260.91280.9559
SGI 1.2361.20641.18231.16461.19071.15851.14121.14641.13221.1146
DEPI 1.09891.17011.0120.94540.87310.78170.86730.9380.95520.9788
SGAI 0.99641.0311.06631.08591.0011.00480.98080.95080.95060.9693
LVGI 1.13461.13231.12471.0241.00270.99270.98460.92960.95680.9524
TATA 0.06260.04550.0511-0.0158-0.0194-0.0453-0.052-0.0283-0.029-0.0311
M-score -1.90-1.93-1.86-2.47-2.37-2.60-2.62-2.48-2.54-2.65
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