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NCR Corp (NYSE:NCR)
Beneish M-Score
-2.42 (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.

NCR Corp has a M-score of -2.42 suggests that the company is not a manipulator.

NCR' s 10-Year Beneish M-Score Range
Min: -3.07   Max: -2.11
Current: -2.42

-3.07
-2.11

During the past 13 years, the highest Beneish M-Score of NCR Corp was -2.11. The lowest was -3.07. 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 NCR Corp 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 * 0.974+0.528 * 1.0814+0.404 * 1.4123+0.892 * 1.0764+0.115 * 0.8893
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0794+4.679 * -0.0346-0.327 * 1.0038
=-2.42

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $1,363 Mil.
Revenue was 1768 + 1647 + 1658 + 1518 = $6,591 Mil.
Gross Profit was 432 + 404 + 480 + 416 = $1,732 Mil.
Total Current Assets was $3,088 Mil.
Total Assets was $8,607 Mil.
Property, Plant and Equipment(Net PPE) was $396 Mil.
Depreciation, Depletion and Amortization(DDA) was $284 Mil.
Selling, General & Admin. Expense(SGA) was $1,012 Mil.
Total Current Liabilities was $2,070 Mil.
Long-Term Debt was $3,472 Mil.
Net Income was 33 + 15 + 90 + 53 = $191 Mil.
Non Operating Income was -11 + -14 + -3 + -7 = $-35 Mil.
Cash Flow from Operations was 289 + 124 + 80 + 31 = $524 Mil.
Accounts Receivable was $1,300 Mil.
Revenue was 1670 + 1508 + 1535 + 1410 = $6,123 Mil.
Gross Profit was 530 + 415 + 426 + 369 = $1,740 Mil.
Total Current Assets was $4,339 Mil.
Total Assets was $8,108 Mil.
Property, Plant and Equipment(Net PPE) was $352 Mil.
Depreciation, Depletion and Amortization(DDA) was $208 Mil.
Selling, General & Admin. Expense(SGA) was $871 Mil.
Total Current Liabilities was $1,881 Mil.
Long-Term Debt was $3,320 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)
=(1363 / 6591) / (1300 / 6123)
=0.20679715 / 0.21231423
=0.974

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)
=(404 / 6123) / (432 / 6591)
=0.28417442 / 0.26278258
=1.0814

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 - (3088 + 396) / 8607) / (1 - (4339 + 352) / 8108)
=0.5952132 / 0.42143562
=1.4123

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
=6591 / 6123
=1.0764

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))
=(208 / (208 + 352)) / (284 / (284 + 396))
=0.37142857 / 0.41764706
=0.8893

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)
=(1012 / 6591) / (871 / 6123)
=0.15354271 / 0.14225053
=1.0794

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)
=((3472 + 2070) / 8607) / ((3320 + 1881) / 8108)
=0.6438945 / 0.64146522
=1.0038

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
=(191 - -35 - 524) / 8607
=-0.0346

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.

NCR Corp has a M-score of -2.42 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.

NCR Corp Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.3130.7751.0590.73161.1311.01390.99020.93051.16980.974
GMI 1.31591.01440.96680.94011.16250.91110.94070.77821.01021.0814
AQI 0.9250.80680.95381.13231.0760.94861.45430.85971.0111.4123
SGI 0.76221.00461.08471.06940.86771.02151.12311.0831.06861.0764
DEPI 0.92010.9250.95680.99490.98841.25970.80860.74140.94290.8893
SGAI 0.79460.94210.96420.97471.04251.03971.03210.86291.09851.0794
LVGI 1.00861.07680.96761.03960.85160.9611.31881.32281.12461.0038
TATA 0.0011-0.018-0.0172-0.0313-0.0535-0.0259-0.05190.1060.0211-0.0346
M-score -2.24-2.86-2.46-2.80-2.57-2.60-2.60-2.26-2.22-2.42

NCR Corp Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 0.87380.93051.00311.09481.12021.16981.18651.0960.98320.974
GMI 0.86850.77820.80980.84110.87441.01021.00481.00351.03851.0814
AQI 1.02960.85971.04431.02051.04261.0111.14911.16031.21111.4123
SGI 1.14031.0831.07651.07271.07141.06861.05681.05511.06531.0764
DEPI 0.51560.74140.92730.94260.96560.94290.92920.92570.89630.8893
SGAI 0.98580.86290.87720.90140.93791.09851.0761.04641.03961.0794
LVGI 1.09531.32281.32661.41.10851.12461.15361.12521.14191.0038
TATA 0.04390.1060.11130.11860.05550.02110.01840.0061-0.0134-0.0346
M-score -2.41-2.26-2.06-1.97-2.12-2.22-2.18-2.30-2.46-2.42
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