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Motorola Solutions Inc (NYSE:MSI)
Beneish M-Score
-2.65 (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 -2.65 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: -2.65

-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 -2.56.


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 * 0.9524+0.528 * 1.0056+0.404 * 1.3367+0.892 * 1.0002+0.115 * 1.0055
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9651+4.679 * -0.0543-0.327 * 1.0537
=-2.65

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $1,164 Mil.
Revenue was 1532 + 1430 + 1193 + 1682 = $5,837 Mil.
Gross Profit was 762 + 676 + 502 + 838 = $2,778 Mil.
Total Current Assets was $3,804 Mil.
Total Assets was $8,619 Mil.
Property, Plant and Equipment(Net PPE) was $780 Mil.
Depreciation, Depletion and Amortization(DDA) was $257 Mil.
Selling, General & Admin. Expense(SGA) was $973 Mil.
Total Current Liabilities was $2,161 Mil.
Long-Term Debt was $5,044 Mil.
Net Income was 192 + 107 + 17 + 279 = $595 Mil.
Non Operating Income was 6 + -3 + -29 + 39 = $13 Mil.
Cash Flow from Operations was 348 + 291 + 13 + 398 = $1,050 Mil.
Accounts Receivable was $1,222 Mil.
Revenue was 1422 + 1368 + 1223 + 1823 = $5,836 Mil.
Gross Profit was 685 + 648 + 548 + 912 = $2,793 Mil.
Total Current Assets was $4,787 Mil.
Total Assets was $8,086 Mil.
Property, Plant and Equipment(Net PPE) was $467 Mil.
Depreciation, Depletion and Amortization(DDA) was $155 Mil.
Selling, General & Admin. Expense(SGA) was $1,008 Mil.
Total Current Liabilities was $2,029 Mil.
Long-Term Debt was $4,386 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)
=(1164 / 5837) / (1222 / 5836)
=0.19941751 / 0.20938999
=0.9524

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)
=(2793 / 5836) / (2778 / 5837)
=0.47858122 / 0.47592942
=1.0056

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 - (3804 + 780) / 8619) / (1 - (4787 + 467) / 8086)
=0.46815176 / 0.35023497
=1.3367

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
=5837 / 5836
=1.0002

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))
=(155 / (155 + 467)) / (257 / (257 + 780))
=0.24919614 / 0.24783028
=1.0055

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)
=(973 / 5837) / (1008 / 5836)
=0.16669522 / 0.17272104
=0.9651

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)
=((5044 + 2161) / 8619) / ((4386 + 2029) / 8086)
=0.83594384 / 0.79334652
=1.0537

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
=(595 - 13 - 1050) / 8619
=-0.0543

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 -2.65 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 local exchange's currency.

Motorola Solutions Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.09260.83020.7971.3531.29551.121.3190.73271.08980.9982
GMI 1.0921.09220.97580.88030.63210.99020.9921.02051.03721.0083
AQI 0.86172.09490.99631.04640.96861.04411.14341.01730.80681.351
SGI 1.2160.85410.82320.6020.41971.07690.76420.99330.94440.9684
DEPI 1.06790.741.05130.97330.94220.95461.90140.74140.85861.0176
SGAI 1.02091.32371.0331.17321.460.94740.99640.91960.9490.8845
LVGI 1.02561.00841.11440.86020.93060.84011.15391.16941.13081.4462
TATA -0.0008-0.026-0.1506-0.0313-0.00830.0256-0.0170.0420.1931-0.0588
M-score -2.22-2.49-3.58-2.69-3.03-2.11-2.37-2.59-1.65-2.76

Motorola Solutions Inc Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 0.65690.54251.1910.64730.98021.05850.9981.09830.96960.9524
GMI 1.04481.06041.02941.03611.01971.00281.00811.01041.01231.0056
AQI 0.94040.93030.80680.91870.9390.97891.3511.40131.50071.3367
SGI 1.05681.1750.86420.96960.98240.99350.96850.96430.9791.0002
DEPI 0.64370.58640.85860.62770.83530.82941.01761.68821.10091.0055
SGAI 0.94260.95580.93520.89060.8320.80580.86240.88510.9610.9651
LVGI 1.04881.19911.13081.20561.29421.50581.44621.36861.42651.0537
TATA 0.05790.07090.1930.19170.12410.07-0.059-0.0362-0.0592-0.0543
M-score -2.52-2.51-1.63-2.04-2.03-2.26-2.76-2.44-2.72-2.65
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