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ArcelorMittal SA (NYSE:MT)
Beneish M-Score
-3.22 (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 -3.22 suggests that the company is not a manipulator.

MT' s 10-Year Beneish M-Score Range
Min: -3.22   Max: 3.69
Current: -3.22

-3.22
3.69

During the past 13 years, the highest Beneish M-Score of ArcelorMittal SA was 3.69. The lowest was -3.22. And the median was -2.25.


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 * 1.0186+0.528 * 0.1507+0.404 * 0.9668+0.892 * 0.9433+0.115 * 0.9572
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9325+4.679 * -0.057-0.327 * 0.963
=-3.22

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $4,886 Mil.
Revenue was 19848 + 19643 + 20197 + 19752 = $79,440 Mil.
Gross Profit was -51827 + 18407 + 19022 + 18591 = $4,193 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 $-15,191 Mil.
Total Current Liabilities was $25,235 Mil.
Long-Term Debt was $18,219 Mil.
Net Income was -1227 + -193 + -780 + -345 = $-2,545 Mil.
Non Operating Income was 501 + -216 + -554 + -173 = $-442 Mil.
Cash Flow from Operations was 2687 + -448 + 2359 + -302 = $4,296 Mil.
Accounts Receivable was $5,085 Mil.
Revenue was 19309 + 19723 + 22478 + 22703 = $84,213 Mil.
Gross Profit was -60573 + 18431 + 21316 + 21496 = $670 Mil.
Total Current Assets was $31,782 Mil.
Total Assets was $113,998 Mil.
Property, Plant and Equipment(Net PPE) was $53,815 Mil.
Depreciation, Depletion and Amortization(DDA) was $4,702 Mil.
Selling, General & Admin. Expense(SGA) was $-17,270 Mil.
Total Current Liabilities was $23,837 Mil.
Long-Term Debt was $21,965 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)
=(4886 / 79440) / (5085 / 84213)
=0.06150554 / 0.0603826
=1.0186

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)
=(18407 / 84213) / (-51827 / 79440)
=0.00795602 / 0.05278197
=0.1507

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 - (34025 + 51232) / 112308) / (1 - (31782 + 53815) / 113998)
=0.24086441 / 0.24913595
=0.9668

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
=79440 / 84213
=0.9433

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))
=(4702 / (4702 + 53815)) / (4695 / (4695 + 51232))
=0.08035272 / 0.08394872
=0.9572

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)
=(-15191 / 79440) / (-17270 / 84213)
=-0.19122608 / -0.20507523
=0.9325

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)
=((18219 + 25235) / 112308) / ((21965 + 23837) / 113998)
=0.38691812 / 0.40177898
=0.963

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
=(-2545 - -442 - 4296) / 112308
=-0.057

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 -3.22 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.83640.83531.83230.60830.59521.74750.77870.93570.87951.0186
GMI 0.69581.45891.1550.92541.2724.18790.40640.954211.7180.1507
AQI 0.58190.99731.62071.18641.08681.26310.9581.01260.95050.9668
SGI 2.15451.36482.09261.78731.18740.48841.27871.20440.89610.9433
DEPI 1.09331.60241.35180.59490.88861.09730.94110.93820.99250.9572
SGAI 0.85031.15111.33191.0271.02151.14210.70970.88531.040.9581
LVGI 0.68620.97551.02310.99091.03970.81881.10461.0211.02990.963
TATA -0.0184-0.027-0.0217-0.056-0.0453-0.0457-0.0112-0.0004-0.0779-0.057
M-score -0.96-2.14-0.53-2.41-2.75-0.63-2.81-2.372.57-3.23

ArcelorMittal SA Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 0.870.7750.8250.87950.89780.9750.9981.0186
GMI 1.44422.65639.812711.718-3.5492-1.2484-0.40310.1507
AQI 0.90950.91980.96060.95050.92790.91090.92490.9668
SGI 1.14151.04660.94720.89610.860.85990.90320.9433
DEPI 0.92820.88170.93310.99250.97640.98861.00360.9572
SGAI -0.7171-0.4125-0.3574-5.41791.25161.21850.98650.9325
LVGI 1.041.02790.99971.02990.9770.97890.95560.963
TATA -0.0235-0.0539-0.0533-0.0771-0.0748-0.0891-0.085-0.057
M-score -2.11-1.841.933.69-5.52-4.30-3.72-3.22
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