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Masco Corp (NYSE:MAS)
Beneish M-Score
-2.31 (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 -2.31 suggests that the company is not a manipulator.

MAS' s 10-Year Beneish M-Score Range
Min: -3.5   Max: -2.22
Current: -2.31

-3.5
-2.22

During the past 13 years, the highest Beneish M-Score of Masco Corp was -2.22. 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 * 0.9936+0.528 * 0.9849+0.404 * 0.9395+0.892 * 1.0426+0.115 * 1.0115
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9743+4.679 * 0.0338-0.327 * 0.9751
=-2.31

* 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 $1,040 Mil.
Revenue was 2064 + 2232 + 2260 + 1965 = $8,521 Mil.
Gross Profit was 568 + 611 + 661 + 547 = $2,387 Mil.
Total Current Assets was $3,863 Mil.
Total Assets was $7,167 Mil.
Property, Plant and Equipment(Net PPE) was $1,139 Mil.
Depreciation, Depletion and Amortization(DDA) was $167 Mil.
Selling, General & Admin. Expense(SGA) was $1,607 Mil.
Total Current Liabilities was $2,211 Mil.
Long-Term Debt was $2,919 Mil.
Net Income was 100 + 543 + 139 + 74 = $856 Mil.
Non Operating Income was 2 + 7 + 6 + -3 = $12 Mil.
Cash Flow from Operations was 296 + 245 + 305 + -244 = $602 Mil.
Accounts Receivable was $1,004 Mil.
Revenue was 1998 + 2150 + 2149 + 1876 = $8,173 Mil.
Gross Profit was 531 + 607 + 609 + 508 = $2,255 Mil.
Total Current Assets was $3,468 Mil.
Total Assets was $6,957 Mil.
Property, Plant and Equipment(Net PPE) was $1,252 Mil.
Depreciation, Depletion and Amortization(DDA) was $186 Mil.
Selling, General & Admin. Expense(SGA) was $1,582 Mil.
Total Current Liabilities was $1,686 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)
=(1040 / 8521) / (1004 / 8173)
=0.1220514 / 0.12284351
=0.9936

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)
=(611 / 8173) / (568 / 8521)
=0.27590848 / 0.28013144
=0.9849

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 - (3863 + 1139) / 7167) / (1 - (3468 + 1252) / 6957)
=0.30207897 / 0.32154664
=0.9395

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
=8521 / 8173
=1.0426

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))
=(186 / (186 + 1252)) / (167 / (167 + 1139))
=0.12934631 / 0.12787136
=1.0115

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)
=(1607 / 8521) / (1582 / 8173)
=0.18859289 / 0.19356417
=0.9743

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)
=((2919 + 2211) / 7167) / ((3421 + 1686) / 6957)
=0.71578066 / 0.73408078
=0.9751

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
=(856 - 12 - 602) / 7167
=0.0338

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 -2.31 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.93390.94010.94410.86461.19770.94031.03191.0170.98680.9936
GMI 1.08231.03621.00781.09890.96041.05771.02490.91550.94590.9849
AQI 0.89580.93841.10320.98370.95590.8850.87341.07570.9480.9395
SGI 1.06090.99990.92260.82240.82160.96070.99751.00371.09051.0426
DEPI 0.94621.06670.98690.9460.88210.82120.9631.03421.07431.0115
SGAI 0.92691.03561.06711.10721.14890.97780.98870.97030.94510.9743
LVGI 1.07351.03590.95891.06951.0191.15521.12891.00420.95510.9751
TATA -0.0377-0.0339-0.079-0.1195-0.0989-0.1819-0.1221-0.0609-0.0530.0338
M-score -2.68-2.71-2.92-3.32-3.00-3.50-3.11-2.75-2.68-2.31

Masco Corp Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 1.01421.0170.98071.00020.96850.98680.94760.96560.9610.9936
GMI 0.960.91550.93640.92170.91350.94590.94260.950.97740.9849
AQI 0.93681.07571.14671.11171.00790.9480.95080.94370.92010.9395
SGI 1.0061.00371.0061.04041.08161.09051.09211.07771.05611.0426
DEPI 0.95781.03421.0251.04521.03481.07431.08191.08261.04731.0115
SGAI 0.96310.97030.98130.99160.94940.94510.95560.95040.97590.9743
LVGI 1.10491.00420.99980.97230.9790.95510.96540.96290.96210.9751
TATA -0.1224-0.0609-0.0522-0.0438-0.0585-0.053-0.0433-0.03810.02770.0338
M-score -3.11-2.75-2.70-2.63-2.73-2.68-2.67-2.64-2.36-2.31
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