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Masco Corp (NYSE:MAS)
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.

Masco Corp has a M-score of -2.65 suggests that the company is not a manipulator.

MAS' s 10-Year Beneish M-Score Range
Min: -3.5   Max: -0.95
Current: -2.65

-3.5
-0.95

During the past 13 years, the highest Beneish M-Score of Masco Corp was -0.95. The lowest was -3.50. And the median was -2.68.


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 Masco Corp 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 * 0.9807+0.528 * 0.9308+0.404 * 0.9437+0.892 * 1.0611+0.115 * 1.0826
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.961+4.679 * -0.0378-0.327 * 0.9629
=-2.65

* 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 $1,306 Mil.
Revenue was 2260 + 1965 + 1998 + 2150 = $8,373 Mil.
Gross Profit was 661 + 547 + 531 + 607 = $2,346 Mil.
Total Current Assets was $3,783 Mil.
Total Assets was $7,227 Mil.
Property, Plant and Equipment(Net PPE) was $1,216 Mil.
Depreciation, Depletion and Amortization(DDA) was $186 Mil.
Selling, General & Admin. Expense(SGA) was $1,601 Mil.
Total Current Liabilities was $2,462 Mil.
Long-Term Debt was $2,921 Mil.
Net Income was 139 + 74 + 45 + 103 = $361 Mil.
Non Operating Income was 6 + -3 + -16 + 0 = $-13 Mil.
Cash Flow from Operations was 305 + -244 + 295 + 291 = $647 Mil.
Accounts Receivable was $1,255 Mil.
Revenue was 2149 + 1876 + 1890 + 1976 = $7,891 Mil.
Gross Profit was 609 + 508 + 441 + 500 = $2,058 Mil.
Total Current Assets was $3,479 Mil.
Total Assets was $7,062 Mil.
Property, Plant and Equipment(Net PPE) was $1,276 Mil.
Depreciation, Depletion and Amortization(DDA) was $214 Mil.
Selling, General & Admin. Expense(SGA) was $1,570 Mil.
Total Current Liabilities was $2,042 Mil.
Long-Term Debt was $3,421 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)
=(1306 / 8373) / (1255 / 7891)
=0.15597755 / 0.15904195
=0.9807

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)
=(547 / 7891) / (661 / 8373)
=0.26080345 / 0.28018631
=0.9308

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 - (3783 + 1216) / 7227) / (1 - (3479 + 1276) / 7062)
=0.30828836 / 0.32667799
=0.9437

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
=8373 / 7891
=1.0611

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))
=(214 / (214 + 1276)) / (186 / (186 + 1216))
=0.14362416 / 0.13266762
=1.0826

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)
=(1601 / 8373) / (1570 / 7891)
=0.19120984 / 0.19896084
=0.961

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)
=((2921 + 2462) / 7227) / ((3421 + 2042) / 7062)
=0.74484572 / 0.77357689
=0.9629

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
=(361 - -13 - 647) / 7227
=-0.0378

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.

Masco Corp 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.

Masco Corp Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.93710.94620.930.94560.87181.21230.92721.04651.01790.9859
GMI 0.99481.07871.03661.00951.10230.95571.06861.01440.94840.913
AQI 0.94630.89580.93841.10320.98370.95590.8850.87341.02820.9845
SGI 1.10411.0471.01080.92110.81560.81170.97430.98351.03721.0553
DEPI 10.94621.06670.98690.9460.88210.82120.9631.10341.007
SGAI 0.98140.93511.03661.06561.1111.14210.97630.9960.94950.9604
LVGI 1.03181.07351.03590.95891.06951.0191.15521.12891.00420.9764
TATA -0.047-0.0361-0.0326-0.0663-0.1192-0.0989-0.1819-0.1221-0.0611-0.0529
M-score -2.70-2.68-2.70-2.86-3.32-3.00-3.50-3.11-2.71-2.73

Masco Corp Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 1.0611.00631.02211.01790.96410.99590.9770.98590.97030.9807
GMI 0.96890.9660.95380.94840.95590.93270.91220.9130.91780.9308
AQI 0.83610.85620.93681.02821.14671.11171.00790.98450.95080.9437
SGI 1.00771.00880.99831.03721.02321.04491.07221.05531.06661.0611
DEPI 0.960.94010.95781.10341.0251.04521.03481.0071.08191.0826
SGAI 0.96520.93260.94490.94830.96980.98460.95460.96160.96710.961
LVGI 1.12871.14941.10491.00420.99980.97230.9790.97640.96540.9629
TATA -0.1031-0.1143-0.1224-0.0611-0.0524-0.0439-0.0586-0.0529-0.043-0.0378
M-score -3.02-3.12-3.11-2.71-2.69-2.62-2.74-2.73-2.69-2.65
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