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ArcelorMittal SA (NYSE:MT)
Beneish M-Score
-0.71 (As of Today)

Warning Sign:

Beneish M-Score -0.71 higher than -2.22, which implies that it might have manipulated its financial results.

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.

ArcelorMittal SA has a M-score of -3.07 suggests that the company is not a manipulator.

MT' s 10-Year Beneish M-Score Range
Min: -3.09   Max: -0.31
Current: -0.71

-3.09
-0.31

During the past 13 years, the highest Beneish M-Score of ArcelorMittal SA was -0.31. The lowest was -3.09. And the median was -2.37.


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 ArcelorMittal SA 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 * 0.758+0.528 * 0.6916+0.404 * 1.0322+0.892 * 0.998+0.115 * 1.0742
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.99+4.679 * -0.0482-0.327 * 1.0006
=-3.07

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $3,696 Mil.
Revenue was 18723 + 20067 + 20704 + 19788 = $79,282 Mil.
Gross Profit was -51608 + 19121 + 19773 + 18708 = $5,994 Mil.
Total Current Assets was $28,057 Mil.
Total Assets was $99,179 Mil.
Property, Plant and Equipment(Net PPE) was $46,465 Mil.
Depreciation, Depletion and Amortization(DDA) was $3,939 Mil.
Selling, General & Admin. Expense(SGA) was $2,960 Mil.
Total Current Liabilities was $21,123 Mil.
Long-Term Debt was $17,275 Mil.
Net Income was -955 + 22 + 52 + -205 = $-1,086 Mil.
Non Operating Income was 984 + -603 + -209 + -344 = $-172 Mil.
Cash Flow from Operations was 2292 + 501 + 1548 + -471 = $3,870 Mil.
Accounts Receivable was $4,886 Mil.
Revenue was 19848 + 19643 + 20197 + 19752 = $79,440 Mil.
Gross Profit was -51967 + 18508 + 19022 + 18591 = $4,154 Mil.
Total Current Assets was $34,025 Mil.
Total Assets was $112,308 Mil.
Property, Plant and Equipment(Net PPE) was $51,232 Mil.
Depreciation, Depletion and Amortization(DDA) was $4,695 Mil.
Selling, General & Admin. Expense(SGA) was $2,996 Mil.
Total Current Liabilities was $25,235 Mil.
Long-Term Debt was $18,219 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)
=(3696 / 79282) / (4886 / 79440)
=0.0466184 / 0.06150554
=0.758

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)
=(19121 / 79440) / (-51608 / 79282)
=0.05229104 / 0.07560354
=0.6916

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 - (28057 + 46465) / 99179) / (1 - (34025 + 51232) / 112308)
=0.2486111 / 0.24086441
=1.0322

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
=79282 / 79440
=0.998

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))
=(4695 / (4695 + 51232)) / (3939 / (3939 + 46465))
=0.08394872 / 0.07814856
=1.0742

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)
=(2960 / 79282) / (2996 / 79440)
=0.03733508 / 0.037714
=0.99

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)
=((17275 + 21123) / 99179) / ((18219 + 25235) / 112308)
=0.38715857 / 0.38691812
=1.0006

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
=(-1086 - -172 - 3870) / 99179
=-0.0482

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.

ArcelorMittal SA has a M-score of -3.07 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.

ArcelorMittal SA Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.83531.83230.60830.59521.74750.77870.93570.87951.01860.758
GMI 1.45891.1550.92541.2724.18790.40640.954211.7180.15070.6981
AQI 0.99731.62071.18641.08681.26310.9581.01260.95050.96681.0322
SGI 1.36482.09261.78731.18740.48841.27871.20440.89610.94330.998
DEPI 1.60241.35180.59490.88861.09730.94110.93820.99250.95721.0742
SGAI 1.15111.33191.0271.02151.14210.70970.88531.040.95810.99
LVGI 0.97551.02310.99091.03970.81881.10461.0211.02990.9631.0006
TATA -0.027-0.0217-0.056-0.0453-0.0457-0.0112-0.0004-0.0779-0.057-0.0482
M-score -2.14-0.53-2.41-2.75-0.63-2.81-2.372.57-3.23-3.07

ArcelorMittal SA Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 0.8250.87950.89780.9750.9981.01860.92520.88550.83980.758
GMI 9.812711.718-3.5492-1.2484-0.41230.1521-0.5118-0.9133-0.80510.6916
AQI 0.96060.95050.92790.91090.92490.96681.02091.06241.02591.0322
SGI 0.94720.89610.860.85990.90320.94330.9781.01271.01910.998
DEPI 0.93310.99250.97640.98861.00360.95720.97961.04861.04721.0742
SGAI -0.51841.2011-0.06650.03290.0442-0.18393.17-6.4274-4.04820.99
LVGI 0.99971.02990.9770.97890.95560.9631.00880.97831.03121.0006
TATA -0.0533-0.0771-0.0748-0.0891-0.085-0.057-0.0532-0.0422-0.0477-0.0482
M-score 1.952.55-5.29-4.10-3.56-3.03-3.99-2.47-2.91-3.07
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