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Motorola Solutions Inc (NYSE:MSI)
Beneish M-Score
-2.37 (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 -2.37 suggests that the company is not a manipulator.

MSI' s Beneish M-Score Range Over the Past 10 Years
Min: -3.72   Max: -0.86
Current: -2.37

-3.72
-0.86

During the past 13 years, the highest Beneish M-Score of Motorola Solutions Inc was -0.86. The lowest was -3.72. And the median was -2.61.


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 * 1.0983+0.528 * 1.0104+0.404 * 1.4013+0.892 * 0.9643+0.115 * 1.5762
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.3496+4.679 * -0.0368-0.327 * 1.3686
=-2.37

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $1,148 Mil.
Revenue was 1193 + 1682 + 1422 + 1368 = $5,665 Mil.
Gross Profit was 502 + 838 + 685 + 648 = $2,673 Mil.
Total Current Assets was $4,001 Mil.
Total Assets was $9,049 Mil.
Property, Plant and Equipment(Net PPE) was $997 Mil.
Depreciation, Depletion and Amortization(DDA) was $171 Mil.
Selling, General & Admin. Expense(SGA) was $1,031 Mil.
Total Current Liabilities was $2,032 Mil.
Long-Term Debt was $5,023 Mil.
Net Income was 17 + 279 + 115 + 142 = $553 Mil.
Non Operating Income was -29 + 39 + 9 + 0 = $19 Mil.
Cash Flow from Operations was 13 + 414 + 300 + 140 = $867 Mil.
Accounts Receivable was $1,084 Mil.
Revenue was 1223 + 1823 + 1436 + 1393 = $5,875 Mil.
Gross Profit was 548 + 912 + 685 + 656 = $2,801 Mil.
Total Current Assets was $5,884 Mil.
Total Assets was $9,425 Mil.
Property, Plant and Equipment(Net PPE) was $530 Mil.
Depreciation, Depletion and Amortization(DDA) was $159 Mil.
Selling, General & Admin. Expense(SGA) was $3,058 Mil.
Total Current Liabilities was $1,977 Mil.
Long-Term Debt was $3,392 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)
=(1148 / 5665) / (1084 / 5875)
=0.20264784 / 0.18451064
=1.0983

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)
=(838 / 5875) / (502 / 5665)
=0.47676596 / 0.47184466
=1.0104

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 - (4001 + 997) / 9049) / (1 - (5884 + 530) / 9425)
=0.44767378 / 0.3194695
=1.4013

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
=5665 / 5875
=0.9643

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))
=(159 / (159 + 530)) / (171 / (171 + 997))
=0.23076923 / 0.14640411
=1.5762

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)
=(1031 / 5665) / (3058 / 5875)
=0.1819947 / 0.52051064
=0.3496

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)
=((5023 + 2032) / 9049) / ((3392 + 1977) / 9425)
=0.77964416 / 0.56965517
=1.3686

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
=(553 - 19 - 867) / 9049
=-0.0368

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 -2.37 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 1.14150.83020.7971.36831.0691.34220.95071.0211.08510.9982
GMI 1.0771.09220.97580.86990.89490.70781.01111.0251.01311.0083
AQI 0.86172.09490.99631.00120.90341.16991.14340.96910.84691.3768
SGI 1.16380.85410.82320.73120.87470.42541.06030.99980.67630.9684
DEPI 1.17870.741.05130.98211.040.85721.45980.90440.91671.0176
SGAI 1.00281.32371.0331.06781.13851.33480.96820.93652.50120.3391
LVGI 1.02561.00841.11440.86020.93890.83271.15391.16941.13081.4481
TATA -0.0008-0.0239-0.1504-0.0311-0.05290.0237-0.01670.00950.184-0.0585
M-score -2.21-2.48-3.58-2.56-2.87-2.67-2.48-2.47-2.20-2.66

Motorola Solutions Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.0211.0740.7710.77130.98890.91071.28551.28551.09531.0983
GMI 1.02521.02541.03031.03451.01561.01631.00760.99551.00561.0104
AQI 0.96910.99420.94040.93030.84690.91870.9390.97891.37681.4013
SGI 0.99980.97810.90040.82640.74210.68920.7490.81810.88250.9643
DEPI 0.90440.89090.8770.94480.91670.97560.97670.89641.01761.5762
SGAI 0.93650.94590.94780.96132.36872.45942.44242.43990.36950.3496
LVGI 1.16941.11481.04881.19911.13081.20561.29421.50581.44811.3686
TATA 0.0094-0.0020.04570.05810.1840.18220.10570.0602-0.0587-0.0368
M-score -2.47-2.47-2.59-2.65-2.20-2.33-2.31-2.53-2.65-2.37
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