Switch to:
MasterCard Inc (NYSE:MA)
Beneish M-Score
-1.61 (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.

MasterCard Inc has a M-score of -2.26 suggests that the company is not a manipulator.

MA' s 10-Year Beneish M-Score Range
Min: -3.48   Max: -1.29
Current: -1.61

-3.48
-1.29

During the past 13 years, the highest Beneish M-Score of MasterCard Inc was -1.29. The lowest was -3.48. And the median was -2.58.


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 MasterCard 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 * 1.0115+0.528 * 1+0.404 * 1.2485+0.892 * 1.135+0.115 * 0.9596
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0214+4.679 * 0.0123-0.327 * 1.1885
=-2.26

* 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 $1,109 Mil.
Revenue was 2416 + 2503 + 2377 + 2177 = $9,473 Mil.
Gross Profit was 2416 + 2503 + 2377 + 2177 = $9,473 Mil.
Total Current Assets was $10,997 Mil.
Total Assets was $15,329 Mil.
Property, Plant and Equipment(Net PPE) was $615 Mil.
Depreciation, Depletion and Amortization(DDA) was $321 Mil.
Selling, General & Admin. Expense(SGA) was $4,046 Mil.
Total Current Liabilities was $6,222 Mil.
Long-Term Debt was $1,494 Mil.
Net Income was 801 + 1015 + 931 + 870 = $3,617 Mil.
Non Operating Income was 5 + 9 + 5 + 2 = $21 Mil.
Cash Flow from Operations was 725 + 1385 + 729 + 568 = $3,407 Mil.
Accounts Receivable was $966 Mil.
Revenue was 2126 + 2218 + 2096 + 1906 = $8,346 Mil.
Gross Profit was 2126 + 2218 + 2096 + 1906 = $8,346 Mil.
Total Current Assets was $10,950 Mil.
Total Assets was $14,242 Mil.
Property, Plant and Equipment(Net PPE) was $526 Mil.
Depreciation, Depletion and Amortization(DDA) was $258 Mil.
Selling, General & Admin. Expense(SGA) was $3,490 Mil.
Total Current Liabilities was $6,032 Mil.
Long-Term Debt was $0 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)
=(1109 / 9473) / (966 / 8346)
=0.11706957 / 0.11574407
=1.0115

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)
=(2503 / 8346) / (2416 / 9473)
=1 / 1
=1

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 - (10997 + 615) / 15329) / (1 - (10950 + 526) / 14242)
=0.24248157 / 0.1942143
=1.2485

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
=9473 / 8346
=1.135

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))
=(258 / (258 + 526)) / (321 / (321 + 615))
=0.32908163 / 0.34294872
=0.9596

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)
=(4046 / 9473) / (3490 / 8346)
=0.42710862 / 0.41816439
=1.0214

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)
=((1494 + 6222) / 15329) / ((0 + 6032) / 14242)
=0.50335965 / 0.42353602
=1.1885

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
=(3617 - 21 - 3407) / 15329
=0.0123

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.

MasterCard Inc has a M-score of -2.26 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.

MasterCard Inc Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.04671.14610.96511.76350.8451.06120.58121.03990.92481.0115
GMI 1111111111
AQI 0.97880.73420.89331.3030.94180.81431.06410.90260.91921.2485
SGI 1.13281.13221.22291.22721.02151.08631.21211.10081.12921.135
DEPI 1.04461.14051.12430.94141.11910.94790.83570.92090.99560.9596
SGAI 0.9910.95720.90770.84150.89870.90280.94940.95840.96461.0214
LVGI 1.02930.83210.99961.15770.91850.83311.10880.99821.07581.1885
TATA 0.0123-0.0366-0.0224-0.12560.00910.0169-0.0733-0.0135-0.07230.0123
M-score -2.27-2.43-2.43-2.07-2.53-2.28-3.04-2.46-2.82-2.26

MasterCard Inc Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 1.06291.03991.07161.0250.96630.92480.92511.04952.01641.0115
GMI 1111111111
AQI 0.83440.90260.93890.96830.92170.91920.91441.05311.09391.2485
SGI 1.12451.10081.08151.0971.12331.12921.1431.13861.13161.135
DEPI 0.90360.92090.93150.93270.93250.99560.99880.97510.96270.9596
SGAI 0.96110.95840.95990.9460.94550.96460.96540.98670.9851.0214
LVGI 1.16910.99821.01680.93941.0521.07581.35341.40771.26891.1885
TATA -0.057-0.0128-0.0443-0.0403-0.0497-0.0723-0.0422-0.0364-0.03110.0123
M-score -2.70-2.45-2.58-2.55-2.68-2.82-2.76-2.59-1.62-2.26
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK