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Motorola Solutions Inc (NYSE:MSI)
Beneish M-Score
-2.34 (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 -2.34 suggests that the company is not a manipulator.

MSI' s 10-Year Beneish M-Score Range
Min: -3.6   Max: -0.87
Current: -2.34

-3.6
-0.87

During the past 13 years, the highest Beneish M-Score of Motorola Solutions Inc was -0.87. The lowest was -3.60. And the median was -2.62.


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 * 0.6473+0.528 * 1.0361+0.404 * 0.9187+0.892 * 0.9696+0.115 * 0.6277
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 2.4038+4.679 * 0.1822-0.327 * 1.2056
=-2.34

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
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 $174 Mil.
Selling, General & Admin. Expense(SGA) was $3,058 Mil.
Total Current Liabilities was $1,977 Mil.
Long-Term Debt was $3,392 Mil.
Net Income was 74 + 201 + 147 + 824 = $1,246 Mil.
Non Operating Income was 49 + 1 + -25 + -11 = $14 Mil.
Cash Flow from Operations was 151 + -605 + -115 + 84 = $-485 Mil.
Accounts Receivable was $1,727 Mil.
Revenue was 1228 + 1817 + 1517 + 1497 = $6,059 Mil.
Gross Profit was 577 + 901 + 765 + 750 = $2,993 Mil.
Total Current Assets was $6,781 Mil.
Total Assets was $11,615 Mil.
Property, Plant and Equipment(Net PPE) was $795 Mil.
Depreciation, Depletion and Amortization(DDA) was $146 Mil.
Selling, General & Admin. Expense(SGA) was $1,312 Mil.
Total Current Liabilities was $3,026 Mil.
Long-Term Debt was $2,462 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)
=(1084 / 5875) / (1727 / 6059)
=0.18451064 / 0.28503053
=0.6473

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)
=(912 / 6059) / (548 / 5875)
=0.4939759 / 0.47676596
=1.0361

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 - (5884 + 530) / 9425) / (1 - (6781 + 795) / 11615)
=0.3194695 / 0.34773999
=0.9187

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
=5875 / 6059
=0.9696

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))
=(146 / (146 + 795)) / (174 / (174 + 530))
=0.15515409 / 0.24715909
=0.6277

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)
=(3058 / 5875) / (1312 / 6059)
=0.52051064 / 0.21653738
=2.4038

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)
=((3392 + 1977) / 9425) / ((2462 + 3026) / 11615)
=0.56965517 / 0.47249247
=1.2056

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
=(1246 - 14 - -485) / 9425
=0.1822

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 -2.34 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.05071.09260.83020.7971.3532.73670.53020.95071.01661.0898
GMI 1.03651.0921.09220.97580.88030.63210.99021.01111.00121.0372
AQI 0.66550.86172.09490.99631.04640.86441.16991.14341.01730.8068
SGI 1.18881.2160.85410.82320.6020.41971.07691.06030.71590.9444
DEPI 0.92591.06790.741.05130.97331.53860.58461.45980.96570.8586
SGAI 0.871.02091.32371.0331.17321.460.94740.96820.94642.4751
LVGI 0.93271.02561.00841.11440.86020.93890.83271.15391.16941.1308
TATA -0.0523-0.0001-0.0194-0.1506-0.0313-0.00830.0256-0.01670.00920.184
M-score -2.59-2.21-2.45-3.58-2.69-1.68-2.64-2.48-2.72-1.96

Motorola Solutions Inc Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 0.95070.91461.13021.23240.93041.5110.94010.8061.1910.6473
GMI 1.01111.01421.00381.00471.0091.00581.0241.03741.02941.0361
AQI 1.14341.03821.09441.18861.01730.99420.94040.93030.80680.9187
SGI 1.06031.04680.94990.86810.78220.69520.73850.79080.86420.9696
DEPI 1.45981.36041.43551.29540.96571.29280.89340.82540.85860.6277
SGAI 0.96780.96870.97440.96130.95450.96780.96750.96942.45572.4038
LVGI 1.15391.11991.08441.05941.16941.11481.04881.19911.13081.2056
TATA -0.0166-0.00510.02590.04190.0085-0.00290.03260.0390.18390.1822
M-score -2.48-2.51-2.22-2.09-2.74-2.29-2.65-2.75-1.94-2.34
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