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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 -2.61.


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 * 0.9802+0.528 * 1.0197+0.404 * 0.939+0.892 * 0.9824+0.115 * 0.8353
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 2.3871+4.679 * 0.1154-0.327 * 1.2942
=-2.34

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $1,141 Mil.
Revenue was 1368 + 1223 + 1823 + 1436 = $5,850 Mil.
Gross Profit was 648 + 548 + 912 + 685 = $2,793 Mil.
Total Current Assets was $5,632 Mil.
Total Assets was $9,160 Mil.
Property, Plant and Equipment(Net PPE) was $542 Mil.
Depreciation, Depletion and Amortization(DDA) was $168 Mil.
Selling, General & Admin. Expense(SGA) was $3,004 Mil.
Total Current Liabilities was $1,971 Mil.
Long-Term Debt was $3,393 Mil.
Net Income was 142 + 74 + 201 + 147 = $564 Mil.
Non Operating Income was 0 + 49 + 1 + -25 = $25 Mil.
Cash Flow from Operations was 140 + 151 + -605 + -204 = $-518 Mil.
Accounts Receivable was $1,185 Mil.
Revenue was 1393 + 1228 + 1817 + 1517 = $5,955 Mil.
Gross Profit was 656 + 577 + 901 + 765 = $2,899 Mil.
Total Current Assets was $7,066 Mil.
Total Assets was $11,868 Mil.
Property, Plant and Equipment(Net PPE) was $682 Mil.
Depreciation, Depletion and Amortization(DDA) was $168 Mil.
Selling, General & Admin. Expense(SGA) was $1,281 Mil.
Total Current Liabilities was $2,924 Mil.
Long-Term Debt was $2,446 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)
=(1141 / 5850) / (1185 / 5955)
=0.19504274 / 0.19899244
=0.9802

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)
=(548 / 5955) / (648 / 5850)
=0.4868178 / 0.4774359
=1.0197

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 - (5632 + 542) / 9160) / (1 - (7066 + 682) / 11868)
=0.32598253 / 0.34715201
=0.939

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
=5850 / 5955
=0.9824

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))
=(168 / (168 + 682)) / (168 / (168 + 542))
=0.19764706 / 0.23661972
=0.8353

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)
=(3004 / 5850) / (1281 / 5955)
=0.51350427 / 0.21511335
=2.3871

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)
=((3393 + 1971) / 9160) / ((2446 + 2924) / 11868)
=0.58558952 / 0.45247725
=1.2942

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
=(564 - 25 - -518) / 9160
=0.1154

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

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 0.91461.13021.23240.93041.5110.94010.8061.1910.64730.9802
GMI 1.01421.00381.00471.0091.00581.0241.03741.02941.03611.0197
AQI 1.03821.09441.18861.01730.99420.94040.93030.80680.91870.939
SGI 1.04680.94990.86810.78220.69520.73850.79080.86420.96960.9824
DEPI 1.36041.43551.29540.96571.29280.89340.82540.85860.62770.8353
SGAI 0.96870.97440.96130.95450.96780.96750.96942.45572.40382.3871
LVGI 1.11991.08441.05941.16941.11481.04881.19911.13081.20561.2942
TATA -0.00510.02590.04190.0085-0.00290.02510.0390.18390.18220.1154
M-score -2.51-2.22-2.09-2.74-2.29-2.68-2.75-1.94-2.34-2.34
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