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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 10-Year Beneish M-Score Range
Min: -3.44   Max: -1.49
Current: -2.65

-3.44
-1.49

During the past 13 years, the highest Beneish M-Score of Motorola Solutions Inc was -1.49. The lowest was -3.44. And the median was -2.63.


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 * 0.531+0.528 * 1.0521+0.404 * 0.9303+0.892 * 1.2003+0.115 * 0.6368
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.96+4.679 * 0.0394-0.327 * 1.1991
=-2.65

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $1,162 Mil.
Revenue was 1436 + 1393 + 1801 + 4286 = $8,916 Mil.
Gross Profit was 685 + 656 + 845 + 2033 = $4,219 Mil.
Total Current Assets was $7,168 Mil.
Total Assets was $12,195 Mil.
Property, Plant and Equipment(Net PPE) was $664 Mil.
Depreciation, Depletion and Amortization(DDA) was $243 Mil.
Selling, General & Admin. Expense(SGA) was $1,876 Mil.
Total Current Liabilities was $3,024 Mil.
Long-Term Debt was $3,401 Mil.
Net Income was 147 + 824 + 127 + 342 = $1,440 Mil.
Non Operating Income was -25 + -11 + 6 + 6 = $-24 Mil.
Cash Flow from Operations was -115 + 84 + 46 + 969 = $984 Mil.
Accounts Receivable was $1,823 Mil.
Revenue was 1517 + 1497 + 1973 + 2441 = $7,428 Mil.
Gross Profit was 765 + 750 + 955 + 1228 = $3,698 Mil.
Total Current Assets was $6,580 Mil.
Total Assets was $12,058 Mil.
Property, Plant and Equipment(Net PPE) was $841 Mil.
Depreciation, Depletion and Amortization(DDA) was $173 Mil.
Selling, General & Admin. Expense(SGA) was $1,628 Mil.
Total Current Liabilities was $2,840 Mil.
Long-Term Debt was $2,458 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)
=(1162 / 8916) / (1823 / 7428)
=0.1303275 / 0.24542272
=0.531

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)
=(656 / 7428) / (685 / 8916)
=0.49784599 / 0.47319426
=1.0521

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 - (7168 + 664) / 12195) / (1 - (6580 + 841) / 12058)
=0.35776958 / 0.38455797
=0.9303

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
=8916 / 7428
=1.2003

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))
=(173 / (173 + 841)) / (243 / (243 + 664))
=0.17061144 / 0.26791621
=0.6368

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)
=(1876 / 8916) / (1628 / 7428)
=0.21040825 / 0.21917071
=0.96

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)
=((3401 + 3024) / 12195) / ((2458 + 2840) / 12058)
=0.52685527 / 0.43937635
=1.1991

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
=(1440 - -24 - 984) / 12195
=0.0394

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 own currency.

Motorola Solutions Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.87471.09381.11650.98530.67151.3532.73670.53020.95071.021
GMI 0.98781.04841.0771.09220.97580.88030.63210.99021.01111.025
AQI 0.86050.63860.89722.09460.99631.04640.86441.16991.14340.9691
SGI 1.15761.17621.16380.85410.82320.6020.41971.07691.06030.9998
DEPI 1.10761.03661.07610.741.05130.97331.53860.58461.45980.9044
SGAI 0.89270.77951.00281.32371.0331.17321.460.94740.96820.9365
LVGI 0.97740.93181.02771.00841.11440.86020.93890.83271.15391.1694
TATA -0.0564-0.0647-0.0001-0.0173-0.0887-0.0313-0.00830.0237-0.01670.0095
M-score -2.74-2.60-2.23-2.30-3.41-2.69-1.68-2.65-2.48-2.47

Motorola Solutions Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.97041.06720.95940.91741.1241.22290.95741.00590.62220.531
GMI 1.00541.00381.01161.01651.00691.00891.02941.02931.04331.0521
AQI 1.18791.14691.14341.03821.09441.18860.96910.99420.94040.9303
SGI 1.05991.04021.05071.04370.95510.87481.06611.04431.11571.2003
DEPI 1.13251.32721.45981.36041.43551.29540.90440.89090.68260.6368
SGAI 0.94740.96140.97150.97010.97270.95930.94330.95270.95430.96
LVGI 1.09271.07341.15391.11991.08441.05941.16941.11481.04881.1991
TATA -0.01520.0107-0.0166-0.00510.02590.04190.0088-0.00260.03290.0394
M-score -2.45-2.25-2.48-2.51-2.22-2.09-2.47-2.48-2.62-2.65
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