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ArcelorMittal SA (NYSE:MT)
Beneish M-Score
-3.51 (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 -3.63 suggests that the company is not a manipulator.

MT' s 10-Year Beneish M-Score Range
Min: -7.59   Max: 13.44
Current: -3.51

-7.59
13.44

During the past 13 years, the highest Beneish M-Score of ArcelorMittal SA was 13.44. The lowest was -7.59. And the median was -2.40.


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 * 0.8398+0.528 * -0.9072+0.404 * 1.0259+0.892 * 1.0191+0.115 * 1.0464
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * -0.178+4.679 * -0.0477-0.327 * 1.0312
=-3.63

* 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 $4,940 Mil.
Revenue was 20067 + 20704 + 19788 + 19848 = $80,407 Mil.
Gross Profit was 19121 + 19773 + 18708 + -51827 = $5,775 Mil.
Total Current Assets was $30,103 Mil.
Total Assets was $104,073 Mil.
Property, Plant and Equipment(Net PPE) was $48,162 Mil.
Depreciation, Depletion and Amortization(DDA) was $4,080 Mil.
Selling, General & Admin. Expense(SGA) was $3,519 Mil.
Total Current Liabilities was $22,764 Mil.
Long-Term Debt was $17,487 Mil.
Net Income was 22 + 52 + -205 + -1227 = $-1,358 Mil.
Non Operating Income was -603 + -209 + -344 + 501 = $-655 Mil.
Cash Flow from Operations was 501 + 1548 + -471 + 2687 = $4,265 Mil.
Accounts Receivable was $5,772 Mil.
Revenue was 19643 + 20197 + 19752 + 19309 = $78,901 Mil.
Gross Profit was 18407 + 19022 + 18591 + -61161 = $-5,141 Mil.
Total Current Assets was $32,503 Mil.
Total Assets was $111,166 Mil.
Property, Plant and Equipment(Net PPE) was $51,792 Mil.
Depreciation, Depletion and Amortization(DDA) was $4,609 Mil.
Selling, General & Admin. Expense(SGA) was $-19,398 Mil.
Total Current Liabilities was $23,224 Mil.
Long-Term Debt was $18,469 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)
=(4940 / 80407) / (5772 / 78901)
=0.06143744 / 0.07315497
=0.8398

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)
=(19773 / 78901) / (19121 / 80407)
=-0.0651576 / 0.07182211
=-0.9072

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 - (30103 + 48162) / 104073) / (1 - (32503 + 51792) / 111166)
=0.24797978 / 0.24171959
=1.0259

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
=80407 / 78901
=1.0191

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))
=(4609 / (4609 + 51792)) / (4080 / (4080 + 48162))
=0.08171841 / 0.07809808
=1.0464

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)
=(3519 / 80407) / (-19398 / 78901)
=0.04376485 / -0.2458524
=-0.178

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)
=((17487 + 22764) / 104073) / ((18469 + 23224) / 111166)
=0.38675737 / 0.37505172
=1.0312

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
=(-1358 - -655 - 4265) / 104073
=-0.0477

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 -3.63 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 0.96990.89961.83230.60830.59521.63770.83080.93570.87951.0186
GMI 0.27081.43271.32790.92251.27814.46570.37930.988878.91640.0216
AQI 0.58191.18981.32191.21931.06571.28810.9581.01510.96730.9477
SGI 4.07961.26742.09261.78731.18740.52111.19841.20440.89610.9433
DEPI 0.82021.34551.25720.58680.75251.2171.0020.94420.98710.9563
SGAI 1.20171.04221.33191.0271.02151.12830.71840.8851.04250.9561
LVGI 0.68621.06550.9410.98641.04350.81651.10371.01911.05490.9419
TATA -0.0044-0.0256-0.022-0.056-0.0494-0.0463-0.0061-0.0011-0.0815-0.057
M-score -0.29-2.14-0.55-2.40-2.79-0.53-2.82-2.3538.04-3.30

ArcelorMittal SA Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.9750.9981.01860.92520.88550.8398
GMI -1.0559-0.30550.0216-0.6386-1.0229-0.9072
AQI 0.91090.92490.94771.02091.06241.0259
SGI 0.85990.90320.94330.9781.01271.0191
DEPI 0.98340.99660.95630.97711.04671.0464
SGAI -1.0997-0.5590.925-0.167-0.1714-0.178
LVGI 0.97890.95560.94191.00880.97831.0312
TATA -0.0916-0.0868-0.0573-0.0535-0.0422-0.0477
M-score -3.81-3.41-3.29-3.48-3.60-3.63
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