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ArcelorMittal SA (NYSE:MT)
Beneish M-Score
-5.00 (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 -2.89 suggests that the company is not a manipulator.

MT' s 10-Year Beneish M-Score Range
Min: -5   Max: 3.6
Current: -5

-5
3.6

During the past 13 years, the highest Beneish M-Score of ArcelorMittal SA was 3.60. The lowest was -5.00. And the median was -2.47.


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 * 0.8855+0.528 * -1.0229+0.404 * 1.0624+0.892 * 1.0127+0.115 * 1.0467
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * -4.3048+4.679 * -0.0422-0.327 * 0.9783
=-2.89

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $5,260 Mil.
Revenue was 20704 + 19788 + 19848 + 19643 = $79,983 Mil.
Gross Profit was 19773 + 18708 + -51827 + 18407 = $5,061 Mil.
Total Current Assets was $31,538 Mil.
Total Assets was $109,603 Mil.
Property, Plant and Equipment(Net PPE) was $50,835 Mil.
Depreciation, Depletion and Amortization(DDA) was $4,370 Mil.
Selling, General & Admin. Expense(SGA) was $3,287 Mil.
Total Current Liabilities was $23,589 Mil.
Long-Term Debt was $18,132 Mil.
Net Income was 52 + -205 + -1227 + -193 = $-1,573 Mil.
Non Operating Income was -209 + -344 + 501 + -216 = $-268 Mil.
Cash Flow from Operations was 1548 + -471 + 2687 + -448 = $3,316 Mil.
Accounts Receivable was $5,866 Mil.
Revenue was 20197 + 19752 + 19309 + 19723 = $78,981 Mil.
Gross Profit was 19022 + 18591 + -61161 + 18436 = $-5,112 Mil.
Total Current Assets was $34,713 Mil.
Total Assets was $112,633 Mil.
Property, Plant and Equipment(Net PPE) was $51,580 Mil.
Depreciation, Depletion and Amortization(DDA) was $4,660 Mil.
Selling, General & Admin. Expense(SGA) was $-754 Mil.
Total Current Liabilities was $24,882 Mil.
Long-Term Debt was $18,943 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)
=(5260 / 79983) / (5866 / 78981)
=0.06576397 / 0.07427103
=0.8855

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)
=(18708 / 78981) / (19773 / 79983)
=-0.06472443 / 0.06327595
=-1.0229

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 - (31538 + 50835) / 109603) / (1 - (34713 + 51580) / 112633)
=0.2484421 / 0.23385686
=1.0624

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
=79983 / 78981
=1.0127

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))
=(4660 / (4660 + 51580)) / (4370 / (4370 + 50835))
=0.08285917 / 0.0791595
=1.0467

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)
=(3287 / 79983) / (-754 / 78981)
=0.04109623 / -0.0095466
=-4.3048

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)
=((18132 + 23589) / 109603) / ((18943 + 24882) / 112633)
=0.38065564 / 0.38909556
=0.9783

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
=(-1573 - -268 - 3316) / 109603
=-0.0422

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 -2.89 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 1.83640.83531.83230.60830.82441.18230.83080.93571.32340.6769
GMI 0.69581.45891.1550.92541.27814.46570.37930.988878.91640.0216
AQI 0.58190.99731.62071.18641.06571.28810.9581.01510.96730.9477
SGI 2.15451.36482.09261.78731.18740.52111.19841.20440.89610.9433
DEPI 1.09331.60241.35180.59490.75251.2171.0020.94420.98710.9563
SGAI 0.85031.15111.33191.0271.02151.12830.71840.8851.04250.9561
LVGI 0.68620.97551.02310.99091.04350.81651.10371.01911.05490.9419
TATA -0.0184-0.027-0.0217-0.056-0.0494-0.0463-0.0061-0.0011-0.0815-0.057
M-score -0.96-2.14-0.53-2.41-2.58-0.95-2.82-2.3538.44-3.61

ArcelorMittal SA Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.9750.9980.67690.92520.8855
GMI -1.0559-0.30550.0216-0.6386-1.0229
AQI 0.91090.92490.94771.02091.0624
SGI 0.85990.90320.94330.9781.0127
DEPI 0.98340.99660.95630.97711.0467
SGAI -0.0438-0.0349-0.18243.7364-4.3048
LVGI 0.97890.95560.94191.00880.9783
TATA -0.0913-0.0865-0.057-0.0532-0.0422
M-score -3.99-3.50-3.41-4.15-2.89
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