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Motorola Solutions Inc (NYSE:MSI)
Beneish M-Score
-2.76 (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.

Motorola Solutions Inc has a M-score of -2.76 suggests that the company is not a manipulator.

MSI' s Beneish M-Score Range Over the Past 10 Years
Min: -3.72   Max: -1.5
Current: -2.76

-3.72
-1.5

During the past 13 years, the highest Beneish M-Score of Motorola Solutions Inc was -1.50. The lowest was -3.72. And the median was -2.56.


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 Motorola Solutions 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 * 0.998+0.528 * 1.0081+0.404 * 1.3768+0.892 * 0.9685+0.115 * 1.0176
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9182+4.679 * -0.0587-0.327 * 1.4481
=-2.76

* 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 $1,362 Mil.
Revenue was 1682 + 1422 + 1368 + 1223 = $5,695 Mil.
Gross Profit was 838 + 685 + 648 + 548 = $2,719 Mil.
Total Current Assets was $4,582 Mil.
Total Assets was $8,387 Mil.
Property, Plant and Equipment(Net PPE) was $487 Mil.
Depreciation, Depletion and Amortization(DDA) was $150 Mil.
Selling, General & Admin. Expense(SGA) was $1,053 Mil.
Total Current Liabilities was $2,193 Mil.
Long-Term Debt was $4,386 Mil.
Net Income was 279 + 115 + 142 + 74 = $610 Mil.
Non Operating Income was 39 + 9 + 0 + 49 = $97 Mil.
Cash Flow from Operations was 414 + 300 + 140 + 151 = $1,005 Mil.
Accounts Receivable was $1,409 Mil.
Revenue was 1823 + 1436 + 1393 + 1228 = $5,880 Mil.
Gross Profit was 912 + 685 + 656 + 577 = $2,830 Mil.
Total Current Assets was $6,879 Mil.
Total Assets was $10,423 Mil.
Property, Plant and Equipment(Net PPE) was $549 Mil.
Depreciation, Depletion and Amortization(DDA) was $173 Mil.
Selling, General & Admin. Expense(SGA) was $1,184 Mil.
Total Current Liabilities was $2,250 Mil.
Long-Term Debt was $3,396 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)
=(1362 / 5695) / (1409 / 5880)
=0.23915716 / 0.23962585
=0.998

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)
=(685 / 5880) / (838 / 5695)
=0.48129252 / 0.47743635
=1.0081

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 - (4582 + 487) / 8387) / (1 - (6879 + 549) / 10423)
=0.39561226 / 0.28734529
=1.3768

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
=5695 / 5880
=0.9685

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))
=(173 / (173 + 549)) / (150 / (150 + 487))
=0.23961219 / 0.23547881
=1.0176

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)
=(1053 / 5695) / (1184 / 5880)
=0.18489903 / 0.20136054
=0.9182

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)
=((4386 + 2193) / 8387) / ((3396 + 2250) / 10423)
=0.78442828 / 0.54168665
=1.4481

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
=(610 - 97 - 1005) / 8387
=-0.0587

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.

Motorola Solutions Inc has a M-score of -2.76 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.

Motorola Solutions Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.09260.83020.7971.3532.73670.53021.3190.73271.08980.9982
GMI 1.0921.09220.97580.88030.63210.99020.9921.02051.03721.0083
AQI 0.86172.09490.99631.04640.86441.16991.14341.01730.80681.3768
SGI 1.2160.85410.82320.6020.41971.07690.76420.99330.94440.9684
DEPI 1.06790.741.05130.97331.53860.58461.90140.74140.85861.0176
SGAI 1.02091.32371.0331.17321.460.94740.99640.91960.9490.8845
LVGI 1.02561.00841.11440.86020.93890.83271.15391.16941.13081.4481
TATA -0.0008-0.026-0.1506-0.0313-0.00830.0256-0.0170.0420.1931-0.0585
M-score -2.22-2.49-3.58-2.69-1.68-2.64-2.37-2.59-1.65-2.75

Motorola Solutions Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 1.83130.67061.08980.65690.54251.1910.64730.98021.05850.998
GMI 0.98291.02841.02281.04481.06041.02941.03611.01971.00281.0081
AQI 1.18861.01730.99420.94040.93030.80680.91870.9390.97891.3768
SGI 0.58421.08530.96391.05681.1750.86420.96960.98240.99350.9685
DEPI 1.82340.74140.99160.64370.58640.85860.62770.83530.82941.0176
SGAI 0.98350.92770.94330.94260.95580.93520.89060.85740.83140.9182
LVGI 1.05941.16941.11481.04881.19911.13081.20561.29421.50581.4481
TATA 0.04150.04130.03060.05790.07090.1930.19230.12580.072-0.0587
M-score -1.75-2.56-2.31-2.52-2.51-1.63-2.04-2.03-2.26-2.76
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