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NCR Corp (NYSE:NCR)
Beneish M-Score
-2.77 (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 -2.77 suggests that the company is not a manipulator.

NCR' s Beneish M-Score Range Over the Past 10 Years
Min: -3.11   Max: -2.03
Current: -2.77

-3.11
-2.03

During the past 13 years, the highest Beneish M-Score of NCR Corp was -2.03. The lowest was -3.11. And the median was -2.59.


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 * 0.9975+0.528 * 0.7634+0.404 * 1.0473+0.892 * 0.9788+0.115 * 0.8592
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8775+4.679 * -0.0344-0.327 * 1.0191
=-2.77

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $1,358 Mil.
Revenue was 1620 + 1444 + 1680 + 1613 = $6,357 Mil.
Gross Profit was 446 + 380 + 476 + 457 = $1,759 Mil.
Total Current Assets was $2,753 Mil.
Total Assets was $7,751 Mil.
Property, Plant and Equipment(Net PPE) was $290 Mil.
Depreciation, Depletion and Amortization(DDA) was $331 Mil.
Selling, General & Admin. Expense(SGA) was $931 Mil.
Total Current Liabilities was $2,017 Mil.
Long-Term Debt was $3,198 Mil.
Net Income was 76 + 32 + 28 + 98 = $234 Mil.
Non Operating Income was -15 + -10 + -43 + -7 = $-75 Mil.
Cash Flow from Operations was 101 + 23 + 265 + 187 = $576 Mil.
Accounts Receivable was $1,391 Mil.
Revenue was 1604 + 1476 + 1768 + 1647 = $6,495 Mil.
Gross Profit was 146 + 390 + 432 + 404 = $1,372 Mil.
Total Current Assets was $3,040 Mil.
Total Assets was $8,066 Mil.
Property, Plant and Equipment(Net PPE) was $348 Mil.
Depreciation, Depletion and Amortization(DDA) was $294 Mil.
Selling, General & Admin. Expense(SGA) was $1,084 Mil.
Total Current Liabilities was $1,910 Mil.
Long-Term Debt was $3,415 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)
=(1358 / 6357) / (1391 / 6495)
=0.21362278 / 0.21416474
=0.9975

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)
=(1372 / 6495) / (1759 / 6357)
=0.21123941 / 0.27670285
=0.7634

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 - (2753 + 290) / 7751) / (1 - (3040 + 348) / 8066)
=0.6074055 / 0.57996529
=1.0473

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
=6357 / 6495
=0.9788

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))
=(294 / (294 + 348)) / (331 / (331 + 290))
=0.45794393 / 0.53301127
=0.8592

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)
=(931 / 6357) / (1084 / 6495)
=0.14645273 / 0.16689761
=0.8775

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)
=((3198 + 2017) / 7751) / ((3415 + 1910) / 8066)
=0.67281641 / 0.66017853
=1.0191

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
=(234 - -75 - 576) / 7751
=-0.0344

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 -2.77 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.7751.0590.73161.1311.01390.99020.93051.16980.9740.9196
GMI 1.01440.96680.94011.16250.91111.16920.62611.01021.08141.14
AQI 0.80680.95381.13231.0760.94861.45430.85971.0111.40771.0517
SGI 1.00461.08471.06940.86771.02151.12311.0831.06861.07640.9669
DEPI 0.9250.95680.99490.98841.25970.80860.74140.94290.88930.8543
SGAI 0.94210.96420.97471.04251.03971.15680.76981.09851.07941.0649
LVGI 1.07680.96761.03960.85160.9611.31881.32281.12461.00111.0238
TATA -0.018-0.0172-0.0313-0.0535-0.0259-0.10190.1050.0211-0.0348-0.105
M-score -2.86-2.46-2.80-2.57-2.60-2.74-2.33-2.22-2.42-3.02

NCR Corp Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 1.18651.0960.98320.9740.93360.92951.01280.91960.95180.9975
GMI 1.00481.00351.03851.08141.10091.37161.27791.141.13220.7634
AQI 1.14911.16031.21111.40771.03841.01491.01551.05171.02981.0473
SGI 1.05681.05511.06531.07641.0511.02220.99510.96690.96820.9788
DEPI 0.92920.92570.89630.88930.81840.84350.85660.85430.87970.8592
SGAI 1.0761.04641.03961.07941.06411.17571.17921.06491.08380.8775
LVGI 1.15361.12521.14191.00110.9621.00450.9781.02381.05521.0191
TATA 0.01840.0061-0.0134-0.0348-0.0422-0.1074-0.1082-0.105-0.0969-0.0344
M-score -2.18-2.30-2.46-2.42-2.64-2.88-2.87-3.02-2.97-2.77
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