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MasterCard Inc (NYSE:MA)
Beneish M-Score
-2.82 (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 -2.82 suggests that the company is not a manipulator.

MA' s Beneish M-Score Range Over the Past 10 Years
Min: -3.48   Max: -0.34
Current: -2.82

-3.48
-0.34

During the past 13 years, the highest Beneish M-Score of MasterCard Inc was -0.34. The lowest was -3.48. And the median was -2.70.


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 * 0.4567+0.528 * 1+0.404 * 1.389+0.892 * 1.0477+0.115 * 1
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1753+4.679 * -0.0018-0.327 * 1.0147
=-2.82

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $1,081 Mil.
Revenue was 2530 + 2390 + 2230 + 2443 = $9,593 Mil.
Gross Profit was 2530 + 2390 + 2230 + 2443 = $9,593 Mil.
Total Current Assets was $9,625 Mil.
Total Assets was $14,634 Mil.
Property, Plant and Equipment(Net PPE) was $641 Mil.
Depreciation, Depletion and Amortization(DDA) was $357 Mil.
Selling, General & Admin. Expense(SGA) was $4,178 Mil.
Total Current Liabilities was $5,943 Mil.
Long-Term Debt was $1,495 Mil.
Net Income was 977 + 921 + 1020 + 801 = $3,719 Mil.
Non Operating Income was -2 + 7 + 6 + 5 = $16 Mil.
Cash Flow from Operations was 1272 + 821 + 911 + 725 = $3,729 Mil.
Accounts Receivable was $2,259 Mil.
Revenue was 2490 + 2368 + 2172 + 2126 = $9,156 Mil.
Gross Profit was 2490 + 2368 + 2172 + 2126 = $9,156 Mil.
Total Current Assets was $10,956 Mil.
Total Assets was $14,659 Mil.
Property, Plant and Equipment(Net PPE) was $553 Mil.
Depreciation, Depletion and Amortization(DDA) was $308 Mil.
Selling, General & Admin. Expense(SGA) was $3,393 Mil.
Total Current Liabilities was $5,849 Mil.
Long-Term Debt was $1,494 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)
=(1081 / 9593) / (2259 / 9156)
=0.11268633 / 0.24672346
=0.4567

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)
=(2390 / 9156) / (2530 / 9593)
=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 - (9625 + 641) / 14634) / (1 - (10956 + 553) / 14659)
=0.29848298 / 0.21488505
=1.389

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
=9593 / 9156
=1.0477

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))
=(308 / (308 + 553)) / (357 / (357 + 641))
=0.35772358 / 0.35771543
=1

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)
=(4178 / 9593) / (3393 / 9156)
=0.4355259 / 0.37057667
=1.1753

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)
=((1495 + 5943) / 14634) / ((1494 + 5849) / 14659)
=0.50826842 / 0.50092094
=1.0147

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
=(3719 - 16 - 3729) / 14634
=-0.0018

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 -2.82 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.14610.96511.76350.8451.06120.58121.03990.92481.01150.9534
GMI 1111111111
AQI 0.73420.89331.3030.94180.81431.06410.90260.91921.24851.1683
SGI 1.13221.22291.22721.02151.08631.21211.10081.12921.1351.0205
DEPI 1.14051.12430.94141.11910.94790.83570.92090.99560.95960.9754
SGAI 0.95720.90770.84150.89870.90280.94940.95840.96461.02141.008
LVGI 0.83210.99961.15770.91850.83311.10880.99821.07581.18851.1669
TATA -0.0366-0.0224-0.12560.00910.0169-0.0735-0.0165-0.07230.0123-0.0108
M-score -2.43-2.43-2.07-2.53-2.28-3.04-2.47-2.82-2.26-2.55

MasterCard Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 0.96630.92480.92561.05122.02241.01150.97350.9250.45670.9534
GMI 1111111111
AQI 0.92170.91920.91441.05311.09391.24851.27061.27751.3891.1683
SGI 1.12331.12921.14231.13681.12831.1351.10671.07531.04771.0205
DEPI 0.93250.99560.99880.97510.96270.95960.9440.986610.9754
SGAI 0.94550.96460.96470.8850.88870.92750.92511.15871.17531.1133
LVGI 1.0521.07581.35341.40771.26891.18851.0041.031.01471.1669
TATA -0.0524-0.0723-0.0422-0.0364-0.03110.0123-0.0005-0.0073-0.0018-0.0108
M-score -2.69-2.82-2.76-2.58-1.61-2.24-2.30-2.44-2.82-2.56
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