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ArcelorMittal SA (NYSE:MT)
Beneish M-Score
-2.60 (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 -2.78 suggests that the company is not a manipulator.

MT' s Beneish M-Score Range Over the Past 10 Years
Min: -83.81   Max: 0.11
Current: -2.6

-83.81
0.11

During the past 13 years, the highest Beneish M-Score of ArcelorMittal SA was 0.11. The lowest was -83.81. 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 * 0.8784+0.528 * 0.1819+0.404 * 1.0057+0.892 * 0.8497+0.115 * 0.9379
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * -2.6313+4.679 * -0.0456-0.327 * 1.0764
=-2.78

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $3,687 Mil.
Revenue was 15589 + 16890 + 17118 + 18723 = $68,320 Mil.
Gross Profit was 15589 + -14662 + 17118 + 17741 = $35,786 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 $32,452 Mil.
Total Current Liabilities was $17,701 Mil.
Long-Term Debt was $17,932 Mil.
Net Income was -711 + 179 + -728 + -955 = $-2,215 Mil.
Non Operating Income was -379 + 881 + -758 + -929 = $-1,185 Mil.
Cash Flow from Operations was 473 + 1019 + -915 + 2292 = $2,869 Mil.
Accounts Receivable was $4,940 Mil.
Revenue was 20067 + 20704 + 19788 + 19848 = $80,407 Mil.
Gross Profit was 20067 + 19773 + 19788 + -51967 = $7,661 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 $-14,515 Mil.
Total Current Liabilities was $22,764 Mil.
Long-Term Debt was $17,487 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)
=(3687 / 68320) / (4940 / 80407)
=0.05396663 / 0.06143744
=0.8784

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)
=(-14662 / 80407) / (15589 / 68320)
=0.09527777 / 0.52379977
=0.1819

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 - (23765 + 40480) / 85590) / (1 - (30103 + 48162) / 104073)
=0.24938661 / 0.24797978
=1.0057

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
=68320 / 80407
=0.8497

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))
=(4080 / (4080 + 48162)) / (3677 / (3677 + 40480))
=0.07809808 / 0.08327106
=0.9379

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)
=(32452 / 68320) / (-14515 / 80407)
=0.475 / -0.18051911
=-2.6313

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)
=((17932 + 17701) / 85590) / ((17487 + 22764) / 104073)
=0.416322 / 0.38675737
=1.0764

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
=(-2215 - -1185 - 2869) / 85590
=-0.0456

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 -2.78 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.83230.60830.59521.74750.77870.93570.87951.01860.7580.9039
GMI 1.1550.92541.2724.18790.40640.954211.7180.15070.69810.0756
AQI 1.62071.18641.08681.26310.9581.01260.95050.96681.03220.9809
SGI 2.09261.78731.18740.48841.27871.20440.89610.94330.9980.8019
DEPI 1.35180.59490.88861.09730.94110.93820.99250.95721.07420.4296
SGAI 1.33191.0271.02151.14210.70970.88531.040.95810.990
LVGI 1.02310.99091.03970.81881.10461.0211.02990.9631.00061.1939
TATA -0.0217-0.056-0.0453-0.0457-0.0112-0.0004-0.0779-0.057-0.0482-0.1043
M-score -0.53-2.41-2.75-0.63-2.81-2.372.57-3.23-3.07-3.69

ArcelorMittal SA Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 0.9981.01860.92520.88550.83980.7580.79540.89460.87840.9039
GMI -0.41590.1507-0.4055-0.7452-0.5870.05410.06960.13790.18191.9373
AQI 0.92490.96681.02091.06241.02591.02681.01580.98511.00570.986
SGI 0.90320.94330.9781.01271.01910.9980.9640.91020.84970.8019
DEPI 1.00360.95720.97961.04861.04721.01460.96530.9610.93790.4549
SGAI 0.0442-0.1839-16.938228.836116.697718.0636-3.6884-2.7101-2.63130.3589
LVGI 0.95560.9631.00880.97831.03121.00061.03581.0741.07641.1939
TATA -0.085-0.057-0.0532-0.0422-0.0477-0.0289-0.0286-0.0323-0.0456-0.1151
M-score -3.56-3.03-0.47-8.44-6.37-6.26-2.53-2.66-2.78-2.81
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