Switch to:
Motorola Solutions Inc (NYSE:MSI)
Beneish M-Score
-1.93 (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 -1.93 signals that the company is a manipulator.

MSI' s 10-Year Beneish M-Score Range
Min: -3.58   Max: -1.5
Current: -1.93

-3.58
-1.5

During the past 13 years, the highest Beneish M-Score of Motorola Solutions Inc was -1.50. The lowest was -3.58. And the median was -2.57.


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 * 1.0852+0.528 * 1.032+0.404 * 0.8068+0.892 * 0.9484+0.115 * 0.8586
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 2.324+4.679 * 0.184-0.327 * 1.1308
=-1.93

* 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 $1,409 Mil.
Revenue was 1823 + 1436 + 1393 + 1801 = $6,453 Mil.
Gross Profit was 912 + 685 + 656 + 845 = $3,098 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 $3,229 Mil.
Total Current Liabilities was $2,250 Mil.
Long-Term Debt was $3,396 Mil.
Net Income was 201 + 147 + 824 + 127 = $1,299 Mil.
Non Operating Income was 1 + -25 + -11 + 6 = $-29 Mil.
Cash Flow from Operations was -605 + -115 + 84 + 46 = $-590 Mil.
Accounts Receivable was $1,369 Mil.
Revenue was 1817 + 1517 + 1497 + 1973 = $6,804 Mil.
Gross Profit was 901 + 765 + 750 + 955 = $3,371 Mil.
Total Current Assets was $7,020 Mil.
Total Assets was $11,851 Mil.
Property, Plant and Equipment(Net PPE) was $610 Mil.
Depreciation, Depletion and Amortization(DDA) was $158 Mil.
Selling, General & Admin. Expense(SGA) was $1,465 Mil.
Total Current Liabilities was $3,220 Mil.
Long-Term Debt was $2,457 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)
=(1409 / 6453) / (1369 / 6804)
=0.21834806 / 0.20120517
=1.0852

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 / 6804) / (912 / 6453)
=0.49544386 / 0.48008678
=1.032

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 - (6879 + 549) / 10423) / (1 - (7020 + 610) / 11851)
=0.28734529 / 0.35617247
=0.8068

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
=6453 / 6804
=0.9484

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))
=(158 / (158 + 610)) / (173 / (173 + 549))
=0.20572917 / 0.23961219
=0.8586

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)
=(3229 / 6453) / (1465 / 6804)
=0.50038742 / 0.21531452
=2.324

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)
=((3396 + 2250) / 10423) / ((2457 + 3220) / 11851)
=0.54168665 / 0.47903131
=1.1308

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
=(1299 - -29 - -590) / 10423
=0.184

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 -1.93 signals that the company is likely to 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

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 1.04070.95070.91461.13021.23240.93041.38040.85750.73441.0852
GMI 1.01211.01111.01421.00381.00471.0091.01041.02761.03971.032
AQI 1.14691.14341.03821.09441.18861.01730.99420.94040.93030.8068
SGI 1.06671.06031.04680.94990.86810.78220.7610.80950.86790.9484
DEPI 1.32721.45981.36041.43551.29540.96571.1910.89340.82540.8586
SGAI 0.95310.96780.96870.97440.96130.95450.9650.96520.96822.324
LVGI 1.07341.15391.11991.08441.05941.16941.11481.04881.19911.1308
TATA 0.0129-0.0166-0.00510.02590.04190.0085-0.00280.03270.03910.184
M-score -2.24-2.48-2.51-2.22-2.09-2.74-2.36-2.66-2.75-1.93
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GuruFocus Premium Plus Membership

FEEDBACK