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NCR Corp (NYSE:NCR)
Beneish M-Score
-2.36 (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 -2.36 suggests that the company is not a manipulator.

NCR' s 10-Year Beneish M-Score Range
Min: -3.11   Max: -2.09
Current: -2.36

-3.11
-2.09

During the past 13 years, the highest Beneish M-Score of NCR Corp was -2.09. The lowest was -3.11. And the median was -2.60.


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 * 1.096+0.528 * 0.8511+0.404 * 1.1603+0.892 * 1.0551+0.115 * 0.9257
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.897+4.679 * 0.0068-0.327 * 1.1252
=-2.36

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
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.
Net Income was 90 + 53 + 198 + 98 = $439 Mil.
Non Operating Income was -3 + -7 + -11 + -3 = $-24 Mil.
Cash Flow from Operations was 80 + 31 + 265 + 27 = $403 Mil.
Accounts Receivable was $1,266 Mil.
Revenue was 1535 + 1410 + 1642 + 1435 = $6,022 Mil.
Gross Profit was 426 + 369 + 332 + 358 = $1,485 Mil.
Total Current Assets was $3,076 Mil.
Total Assets was $6,706 Mil.
Property, Plant and Equipment(Net PPE) was $327 Mil.
Depreciation, Depletion and Amortization(DDA) was $182 Mil.
Selling, General & Admin. Expense(SGA) was $953 Mil.
Total Current Liabilities was $1,838 Mil.
Long-Term Debt was $2,079 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)
=(1464 / 6354) / (1266 / 6022)
=0.23040604 / 0.21022916
=1.096

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)
=(416 / 6022) / (480 / 6354)
=0.24659582 / 0.28973875
=0.8511

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 - (3390 + 402) / 8849) / (1 - (3076 + 327) / 6706)
=0.571477 / 0.49254399
=1.1603

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
=6354 / 6022
=1.0551

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))
=(182 / (182 + 327)) / (253 / (253 + 402))
=0.35756385 / 0.38625954
=0.9257

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)
=(902 / 6354) / (953 / 6022)
=0.14195782 / 0.15825307
=0.897

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)
=((3840 + 1976) / 8849) / ((2079 + 1838) / 6706)
=0.65724941 / 0.58410379
=1.1252

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
=(439 - -24 - 403) / 8849
=0.0068

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 -2.36 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.99181.3130.7751.0590.73161.1310.99121.01290.97171.1202
GMI 1.01471.31591.01440.96680.94011.16250.95710.89540.95170.826
AQI 0.8730.9250.80680.95381.13231.0760.94861.45430.88210.9853
SGI 1.0690.76221.00461.08471.06940.86771.04491.09791.0831.0686
DEPI 1.79430.92010.9250.95680.99491.01181.06140.93740.74140.9429
SGAI 0.91150.79460.94210.96420.97471.04251.04311.02871.03970.9117
LVGI 1.06251.00861.07680.96761.03960.85160.9611.31881.32241.1249
TATA -0.01760.0011-0.018-0.0172-0.0369-0.02-0.0271-0.05190.07030.0218
M-score -2.47-2.24-2.86-2.46-2.83-2.41-2.61-2.61-2.32-2.34

NCR Corp Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.97450.94760.87380.97171.00311.09481.12021.12021.18651.096
GMI 0.93260.91550.90460.95170.95870.96720.97130.8260.83740.8511
AQI 1.44481.47281.02960.88211.04891.02051.04260.98531.14911.1603
SGI 1.15521.16091.14031.0831.07651.07271.07141.06861.05681.0551
DEPI 1.1020.86260.820.6460.81031.09811.11071.08221.06330.9257
SGAI 1.07111.09231.01811.03971.02921.03191.04530.91170.90830.897
LVGI 1.28571.22981.09531.32241.32941.41.10851.12491.15361.1252
TATA -0.0516-0.05440.02010.04580.05560.07840.02080.02180.0190.0068
M-score -2.56-2.60-2.47-2.44-2.29-2.10-2.24-2.32-2.22-2.36
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