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GuruFocus has detected 4 Warning Signs with ArcelorMittal SA $MT.
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ArcelorMittal SA (NYSE:MT)
Beneish M-Score
0.00 (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.

ArcelorMittal SA has a M-score of signals that the company is a manipulator.

During the past 13 years, the highest Beneish M-Score of ArcelorMittal SA was 9.80. The lowest was -3.69. And the median was -2.33.


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 * +0.528 * +0.404 * +0.892 * +0.115 *
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * +4.679 * -0.327 *
=

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $3,412 Mil.
Revenue was 14523 + 14743 + 13399 + 13981 = $56,646 Mil.
Gross Profit was 14523 + 14743 + 13399 + 13981 = $56,646 Mil.
Total Current Assets was $20,969 Mil.
Total Assets was $75,035 Mil.
Property, Plant and Equipment(Net PPE) was $35,807 Mil.
Depreciation, Depletion and Amortization(DDA) was $7,599 Mil.
Selling, General & Admin. Expense(SGA) was $0 Mil.
Total Current Liabilities was $16,519 Mil.
Long-Term Debt was $12,632 Mil.
Net Income was 680 + 1112 + -416 + -6686 = $-5,310 Mil.
Non Operating Income was -114 + 160 + 333 + -997 = $-618 Mil.
Cash Flow from Operations was 876 + 869 + -690 + 1574 = $2,629 Mil.
Accounts Receivable was $3,687 Mil.
Revenue was 15589 + 16890 + 17118 + 18723 = $68,320 Mil.
Gross Profit was 15589 + 16890 + 17118 + -54565 = $-4,968 Mil.
Total Current Assets was $23,765 Mil.
Total Assets was $85,590 Mil.
Property, Plant and Equipment(Net PPE) was $40,480 Mil.
Depreciation, Depletion and Amortization(DDA) was $3,677 Mil.
Selling, General & Admin. Expense(SGA) was $0 Mil.
Total Current Liabilities was $17,701 Mil.
Long-Term Debt was $17,932 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)
=(3412 / 56646) / (3687 / 68320)
=0.06023373 / 0.05396663
=

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)
=(-4968 / 68320) / (56646 / 56646)
=-0.07271663 / 1
=

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 - (20969 + 35807) / 75035) / (1 - (23765 + 40480) / 85590)
=0.24333977 / 0.24938661
=

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
=56646 / 68320
=

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))
=(3677 / (3677 + 40480)) / (7599 / (7599 + 35807))
=0.08327106 / 0.17506796
=

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)
=(0 / 56646) / (0 / 68320)
=0 / 0
=

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)
=((12632 + 16519) / 75035) / ((17932 + 17701) / 85590)
=0.3884987 / 0.416322
=

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
=(-5310 - -618 - 2629) / 75035
=-0.0976

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 signals that the company is likely to 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 local exchange's currency.

ArcelorMittal SA Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.60830.59521.74750.77870.93570.87951.01860.7580.9039
GMI 0.92541.2724.18790.40640.954211.7180.15070.6981-2.9708
AQI 1.18641.08681.26310.9581.01260.95050.96681.03220.9851
SGI 1.78731.18740.48841.27871.20440.89610.94330.9980.8019
DEPI 0.59490.88861.09730.94110.93820.99250.95721.07420.9522
SGAI 1.0271.02151.14210.70970.88531.040.95810.991.0713
LVGI 0.99091.03970.81881.10461.0211.02990.9631.00061.1939
TATA -0.056-0.0453-0.0457-0.0112-0.0004-0.0779-0.0451-0.0289-0.1043
M-score -2.41-2.75-0.63-2.81-2.372.57-3.17-2.98-5.42

ArcelorMittal SA Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI
GMI
AQI
SGI
DEPI
SGAI
LVGI
TATA
M-score
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