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Morgan Stanley (NYSE:MS)
Beneish M-Score
-2.53 (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.

Morgan Stanley has a M-score of -2.53 suggests that the company is not a manipulator.

MS' s Beneish M-Score Range Over the Past 10 Years
Min: -3.54   Max: 1.02
Current: -2.53

-3.54
1.02

During the past 13 years, the highest Beneish M-Score of Morgan Stanley was 1.02. The lowest was -3.54. And the median was -2.37.


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 Morgan Stanley 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 * 0.9024+0.528 * 1+0.404 * 0.9995+0.892 * 1.0277+0.115 * 0.87
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8932+4.679 * 0.0031-0.327 * 1.0078
=-2.53

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $45,407 Mil.
Revenue was 7738 + 7767 + 9743 + 9907 = $35,155 Mil.
Gross Profit was 7738 + 7767 + 9743 + 9907 = $35,155 Mil.
Total Current Assets was $0 Mil.
Total Assets was $787,465 Mil.
Property, Plant and Equipment(Net PPE) was $6,373 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,433 Mil.
Selling, General & Admin. Expense(SGA) was $18,464 Mil.
Total Current Liabilities was $0 Mil.
Long-Term Debt was $163,232 Mil.
Net Income was 908 + 1018 + 1807 + 2394 = $6,127 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 11637 + 490 + 4602 + -13055 = $3,674 Mil.
Accounts Receivable was $48,961 Mil.
Revenue was 7764 + 8907 + 8608 + 8929 = $34,208 Mil.
Gross Profit was 7764 + 8907 + 8608 + 8929 = $34,208 Mil.
Total Current Assets was $0 Mil.
Total Assets was $801,510 Mil.
Property, Plant and Equipment(Net PPE) was $6,108 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,161 Mil.
Selling, General & Admin. Expense(SGA) was $20,116 Mil.
Total Current Liabilities was $0 Mil.
Long-Term Debt was $164,857 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)
=(45407 / 35155) / (48961 / 34208)
=1.29162281 / 1.43127339
=0.9024

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)
=(7767 / 34208) / (7738 / 35155)
=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 - (0 + 6373) / 787465) / (1 - (0 + 6108) / 801510)
=0.99190694 / 0.99237938
=0.9995

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
=35155 / 34208
=1.0277

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))
=(1161 / (1161 + 6108)) / (1433 / (1433 + 6373))
=0.15971936 / 0.18357674
=0.87

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)
=(18464 / 35155) / (20116 / 34208)
=0.5252169 / 0.58804958
=0.8932

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)
=((163232 + 0) / 787465) / ((164857 + 0) / 801510)
=0.20728794 / 0.20568302
=1.0078

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
=(6127 - 0 - 3674) / 787465
=0.0031

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.

Morgan Stanley has a M-score of -2.53 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.

Morgan Stanley Annual Data

Nov06Nov07Nov08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.37531.56340.66552.46850.98360.86291.69350.85930.81090.9042
GMI 1111111111
AQI 0.99940.99950.99650.99851.00160.9991.0011.00040.99960.9995
SGI 1.07890.93920.88270.94421.35381.02470.80591.24151.05731.0257
DEPI 1.30111.80150.72220.91920.78791.04910.85031.04671.25640.87
SGAI 1.08691.26380.85351.4170.77211.00391.19590.82981.01840.8949
LVGI 0.86711.41021.36051.01041.00221.08790.86810.84921.02081.0078
TATA 0.06090.0244-0.10880.0613-0.0441-0.0034-0.0313-0.03920.00290.0031
M-score -1.72-1.99-3.53-0.98-2.37-2.62-2.17-2.49-2.57-2.53

Morgan Stanley Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 0.85930.80030.73420.87430.81250.88440.95960.88930.9024
GMI 111111111
AQI 1.00041.00051.00031.00030.99960.99950.99970.99940.9995
SGI 1.24151.21411.15261.08691.05521.06021.0911.02661.0277
DEPI 1.04671.02641.04721.12611.25641.28511.18030.92360.87
SGAI 0.81160.84420.88830.95621.02031.0221.00321.01510.8932
LVGI 0.84920.92450.94250.93981.02080.8620.90460.95251.0078
TATA -0.0392-0.0395-0.0225-0.02610.00290.02610.02110.02180.0031
M-score -2.49-2.60-2.65-2.60-2.57-2.34-2.29-2.45-2.53
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