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Motorola Solutions, Inc. (NYSE:MSI)
Beneish M-Score
-2.47 (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 -2.47 suggests that the company is not a manipulator.

MSI' s 10-Year Beneish M-Score Range
Min: -3.58   Max: -1.5
Current: -2.47

-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 -2.60.


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 * 1.021+0.528 * 1.0252+0.404 * 0.9691+0.892 * 0.9998+0.115 * 0.9044
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9365+4.679 * 0.0094-0.327 * 1.1694
=-2.47

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $1,920 Mil.
Revenue was 2504 + 2112 + 2107 + 1973 = $8,696 Mil.
Gross Profit was 1213 + 1043 + 1029 + 955 = $4,240 Mil.
Total Current Assets was $7,020 Mil.
Total Assets was $11,851 Mil.
Property, Plant and Equipment(Net PPE) was $810 Mil.
Depreciation, Depletion and Amortization(DDA) was $228 Mil.
Selling, General & Admin. Expense(SGA) was $1,837 Mil.
Total Current Liabilities was $3,220 Mil.
Long-Term Debt was $2,457 Mil.
Net Income was 342 + 307 + 258 + 192 = $1,099 Mil.
Non Operating Income was 6 + 34 + -10 + 14 = $44 Mil.
Cash Flow from Operations was 741 + 152 + 82 + -31 = $944 Mil.
Accounts Receivable was $1,881 Mil.
Revenue was 2441 + 2153 + 2148 + 1956 = $8,698 Mil.
Gross Profit was 1228 + 1087 + 1060 + 973 = $4,348 Mil.
Total Current Assets was $7,401 Mil.
Total Assets was $12,679 Mil.
Property, Plant and Equipment(Net PPE) was $839 Mil.
Depreciation, Depletion and Amortization(DDA) was $208 Mil.
Selling, General & Admin. Expense(SGA) was $1,962 Mil.
Total Current Liabilities was $3,335 Mil.
Long-Term Debt was $1,859 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)
=(1920 / 8696) / (1881 / 8698)
=0.22079117 / 0.21625661
=1.021

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)
=(1043 / 8698) / (1213 / 8696)
=0.49988503 / 0.4875805
=1.0252

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 - (7020 + 810) / 11851) / (1 - (7401 + 839) / 12679)
=0.33929626 / 0.35010648
=0.9691

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
=8696 / 8698
=0.9998

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))
=(208 / (208 + 839)) / (228 / (228 + 810))
=0.19866285 / 0.21965318
=0.9044

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)
=(1837 / 8696) / (1962 / 8698)
=0.21124655 / 0.2255691
=0.9365

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)
=((2457 + 3220) / 11851) / ((1859 + 3335) / 12679)
=0.47903131 / 0.40965376
=1.1694

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
=(1099 - 44 - 944) / 11851
=0.0094

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 -2.47 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.96980.86271.09260.83020.7971.3532.73670.53020.95071.021
GMI 0.96461.03651.0921.09220.97580.88030.63210.99021.01111.025
AQI 0.85960.66550.86172.09490.99631.04640.86441.16991.14340.9691
SGI 1.28111.18881.2160.85410.82320.6020.41971.07691.06030.9998
DEPI 0.70010.92591.06790.741.05130.97331.53860.58461.45980.9044
SGAI 0.83360.871.02091.32371.0331.17321.460.94740.96820.9365
LVGI 0.97850.93271.02561.00841.11440.86020.93890.83271.15391.1694
TATA -0.0931-0.0523-0.0001-0.0194-0.1506-0.0313-0.00830.0256-0.01670.0095
M-score -2.77-2.76-2.21-2.45-3.58-2.69-1.68-2.64-2.48-2.47

Motorola Solutions, Inc. Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 0.61320.53621.14370.95041.04070.95070.91461.05071.06041.021
GMI 0.85910.99070.99981.01131.01211.01111.01421.00971.01481.0252
AQI 1.07811.16991.16621.18791.14691.14341.03821.09441.18860.9691
SGI 0.77361.06491.06771.08211.06671.06031.04681.02181.00890.9998
DEPI 0.64430.58461.02851.13251.32721.45981.36041.25061.04710.9044
SGAI 1.13270.95150.95090.93970.95310.96780.96870.97210.95360.9365
LVGI 0.86550.83270.89571.09271.07341.15391.11991.08441.05941.1694
TATA 0.01180.02560.0294-0.01670.0129-0.0166-0.00510.01410.02360.0094
M-score -3.05-2.65-2.04-2.45-2.24-2.48-2.51-2.30-2.23-2.47
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