Switch to:
Motorola Solutions Inc (NYSE:MSI)
Beneish M-Score
-2.43 (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 -2.43 suggests that the company is not a manipulator.

MSI' s 10-Year Beneish M-Score Range
Min: -3.72   Max: -0.87
Current: -2.43

-3.72
-0.87

During the past 13 years, the highest Beneish M-Score of Motorola Solutions Inc was -0.87. 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 * 1.1182+0.528 * 1.0254+0.404 * 0.9942+0.892 * 0.9781+0.115 * 0.8909
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9459+4.679 * -0.002-0.327 * 1.1148
=-2.43

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $1,798 Mil.
Revenue was 1801 + 2504 + 2112 + 2107 = $8,524 Mil.
Gross Profit was 845 + 1213 + 1043 + 1029 = $4,130 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 $231 Mil.
Selling, General & Admin. Expense(SGA) was $1,804 Mil.
Total Current Liabilities was $3,026 Mil.
Long-Term Debt was $2,462 Mil.
Net Income was 127 + 342 + 307 + 258 = $1,034 Mil.
Non Operating Income was 6 + 6 + 34 + -10 = $36 Mil.
Cash Flow from Operations was 46 + 741 + 152 + 82 = $1,021 Mil.
Accounts Receivable was $1,644 Mil.
Revenue was 1973 + 2441 + 2153 + 2148 = $8,715 Mil.
Gross Profit was 955 + 1228 + 1087 + 1060 = $4,330 Mil.
Total Current Assets was $7,366 Mil.
Total Assets was $12,597 Mil.
Property, Plant and Equipment(Net PPE) was $825 Mil.
Depreciation, Depletion and Amortization(DDA) was $207 Mil.
Selling, General & Admin. Expense(SGA) was $1,950 Mil.
Total Current Liabilities was $2,889 Mil.
Long-Term Debt was $2,450 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)
=(1798 / 8524) / (1644 / 8715)
=0.21093383 / 0.18864028
=1.1182

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)
=(1213 / 8715) / (845 / 8524)
=0.49684452 / 0.48451431
=1.0254

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 - (6781 + 795) / 11615) / (1 - (7366 + 825) / 12597)
=0.34773999 / 0.34976582
=0.9942

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
=8524 / 8715
=0.9781

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))
=(207 / (207 + 825)) / (231 / (231 + 795))
=0.2005814 / 0.2251462
=0.8909

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)
=(1804 / 8524) / (1950 / 8715)
=0.21163773 / 0.22375215
=0.9459

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)
=((2462 + 3026) / 11615) / ((2450 + 2889) / 12597)
=0.47249247 / 0.42383107
=1.1148

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
=(1034 - 36 - 1021) / 11615
=-0.002

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 -2.43 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

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 0.53621.14370.95041.04070.95070.91461.05071.06041.0211.1182
GMI 0.99070.99981.01131.01211.01111.01421.00971.01481.02521.0254
AQI 1.16991.16621.18791.14691.14341.03821.09441.18860.96910.9942
SGI 1.06491.06771.08211.06671.06031.04681.02181.00890.99980.9781
DEPI 0.58461.02851.13251.32721.45981.36041.25061.04710.90440.8909
SGAI 0.95150.95090.93970.95310.96780.96870.97210.95360.93650.9459
LVGI 0.83270.89571.09271.07341.15391.11991.08441.05941.16941.1148
TATA 0.02560.0294-0.01670.0129-0.0166-0.00510.01410.02360.0094-0.002
M-score -2.65-2.04-2.45-2.24-2.48-2.51-2.30-2.23-2.47-2.43
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)
Free 7-day Trial
FEEDBACK
Email Hide