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NCR Corp (NYSE:NCR)
Beneish M-Score
-2.88 (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 -2.88 suggests that the company is not a manipulator.

NCR' s 10-Year Beneish M-Score Range
Min: -3.11   Max: -1.97
Current: -2.88

-3.11
-1.97

During the past 13 years, the highest Beneish M-Score of NCR Corp was -1.97. The lowest was -3.11. And the median was -2.57.


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 * 0.9295+0.528 * 1.3716+0.404 * 1.0149+0.892 * 1.0222+0.115 * 0.8435
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1757+4.679 * -0.1095-0.327 * 1.0045
=-2.88

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
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.
Net Income was -344 + 40 + 33 + 15 = $-256 Mil.
Non Operating Income was 0 + -7 + -11 + -14 = $-32 Mil.
Cash Flow from Operations was 167 + 79 + 289 + 124 = $659 Mil.
Accounts Receivable was $1,464 Mil.
Revenue was 1658 + 1518 + 1670 + 1508 = $6,354 Mil.
Gross Profit was 480 + 416 + 530 + 415 = $1,841 Mil.
Total Current Assets was $3,390 Mil.
Total Assets was $8,849 Mil.
Property, Plant and Equipment(Net PPE) was $402 Mil.
Depreciation, Depletion and Amortization(DDA) was $253 Mil.
Selling, General & Admin. Expense(SGA) was $902 Mil.
Total Current Liabilities was $1,976 Mil.
Long-Term Debt was $3,840 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)
=(1391 / 6495) / (1464 / 6354)
=0.21416474 / 0.23040604
=0.9295

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)
=(390 / 6354) / (146 / 6495)
=0.28973875 / 0.21123941
=1.3716

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 - (3040 + 348) / 8066) / (1 - (3390 + 402) / 8849)
=0.57996529 / 0.571477
=1.0149

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
=6495 / 6354
=1.0222

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))
=(253 / (253 + 402)) / (294 / (294 + 348))
=0.38625954 / 0.45794393
=0.8435

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)
=(1084 / 6495) / (902 / 6354)
=0.16689761 / 0.14195782
=1.1757

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)
=((3415 + 1910) / 8066) / ((3840 + 1976) / 8849)
=0.66017853 / 0.65724941
=1.0045

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
=(-256 - -32 - 659) / 8066
=-0.1095

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 -2.88 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

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 1.00311.09481.12021.16981.18651.0960.98320.9740.93360.9295
GMI 0.80980.84110.87441.01021.00481.00351.03851.08141.10091.3716
AQI 1.04431.02051.04261.0111.14911.16031.21111.41231.03841.0149
SGI 1.07651.07271.07141.06861.05681.05511.06531.07641.0511.0222
DEPI 0.92730.94260.96560.94290.92920.92570.89630.88930.81840.8435
SGAI 0.87720.90140.93791.09851.0761.04641.03961.07941.06411.1757
LVGI 1.32661.41.10851.12461.15361.12521.14191.00380.9621.0045
TATA 0.11130.11860.05550.02110.01840.0061-0.0134-0.0346-0.0422-0.1095
M-score -2.06-1.97-2.12-2.22-2.18-2.30-2.46-2.42-2.64-2.88
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