GWW has been removed from your Stock Email Alerts list.
Please enter Portfolio Name for new portfolio.
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 W W Grainger Inc was -1.89. The lowest was -3.26. And the median was -2.57.
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 W W Grainger 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 * 1.0084||+||0.528 * 1.0124||+||0.404 * 0.9758||+||0.892 * 1.0559||+||0.115 * 0.9565|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9896||+||4.679 * -0.029||-||0.327 * 1.0118|
|This Year (Dec14) TTM:||Last Year (Dec13) TTM:|
|Accounts Receivable was $1,173 Mil.|
Revenue was 2510.959 + 2562.263 + 2506.104 + 2385.627 = $9,965 Mil.
Gross Profit was 1054.801 + 1102.784 + 1080.686 + 1075.971 = $4,314 Mil.
Total Current Assets was $2,968 Mil.
Total Assets was $5,284 Mil.
Property, Plant and Equipment(Net PPE) was $1,324 Mil.
Depreciation, Depletion and Amortization(DDA) was $208 Mil.
Selling, General & Admin. Expense(SGA) was $2,967 Mil.
Total Current Liabilities was $1,262 Mil.
Long-Term Debt was $405 Mil.
Net Income was 148.839 + 230.322 + 205.915 + 216.653 = $802 Mil.
Non Operating Income was -3.089 + -1.131 + 0.018 + -0.503 = $-5 Mil.
Cash Flow from Operations was 296.981 + 334.367 + 160.948 + 167.518 = $960 Mil.
|Accounts Receivable was $1,102 Mil.
Revenue was 2377.232 + 2398.53 + 2381.561 + 2280.435 = $9,438 Mil.
Gross Profit was 1006.397 + 1051.366 + 1046.984 + 1031.736 = $4,136 Mil.
Total Current Assets was $3,044 Mil.
Total Assets was $5,266 Mil.
Property, Plant and Equipment(Net PPE) was $1,209 Mil.
Depreciation, Depletion and Amortization(DDA) was $181 Mil.
Selling, General & Admin. Expense(SGA) was $2,840 Mil.
Total Current Liabilities was $1,196 Mil.
Long-Term Debt was $446 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)|
|=||(1172.924 / 9964.953)||/||(1101.656 / 9437.758)|
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)|
|=||(1102.784 / 9437.758)||/||(1054.801 / 9964.953)|
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 - (2967.549 + 1324.346) / 5284.252)||/||(1 - (3044.285 + 1208.562) / 5266.328)|
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))|
|=||(180.613 / (180.613 + 1208.562))||/||(208.326 / (208.326 + 1324.346))|
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)|
|=||(2967.125 / 9964.953)||/||(2839.628 / 9437.758)|
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)|
|=||((404.536 + 1261.716) / 5284.252)||/||((445.513 + 1195.79) / 5266.328)|
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|
|=||(801.729 - -4.705||-||959.814)||/||5284.252|
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.
W W Grainger Inc has a M-score of -2.57 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
W W Grainger Inc Annual Data
W W Grainger Inc Quarterly Data