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NCR Corp (NYSE:NCR)
Beneish M-Score
-2.87 (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 -2.87 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: -2.87

-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 -2.58.


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 * 1.0128+0.528 * 1.2779+0.404 * 1.0155+0.892 * 0.9951+0.115 * 0.8566
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1792+4.679 * -0.1082-0.327 * 0.978
=-2.87

* 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 $1,424 Mil.
Revenue was 1613 + 1604 + 1476 + 1768 = $6,461 Mil.
Gross Profit was 457 + 146 + 390 + 432 = $1,425 Mil.
Total Current Assets was $2,898 Mil.
Total Assets was $7,887 Mil.
Property, Plant and Equipment(Net PPE) was $338 Mil.
Depreciation, Depletion and Amortization(DDA) was $302 Mil.
Selling, General & Admin. Expense(SGA) was $1,076 Mil.
Total Current Liabilities was $1,835 Mil.
Long-Term Debt was $3,243 Mil.
Net Income was 98 + -344 + 40 + 33 = $-173 Mil.
Non Operating Income was -7 + 0 + -7 + -11 = $-25 Mil.
Cash Flow from Operations was 170 + 167 + 79 + 289 = $705 Mil.
Accounts Receivable was $1,413 Mil.
Revenue was 1647 + 1658 + 1518 + 1670 = $6,493 Mil.
Gross Profit was 404 + 480 + 416 + 530 = $1,830 Mil.
Total Current Assets was $3,212 Mil.
Total Assets was $8,610 Mil.
Property, Plant and Equipment(Net PPE) was $398 Mil.
Depreciation, Depletion and Amortization(DDA) was $270 Mil.
Selling, General & Admin. Expense(SGA) was $917 Mil.
Total Current Liabilities was $2,008 Mil.
Long-Term Debt was $3,660 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)
=(1424 / 6461) / (1413 / 6493)
=0.22039932 / 0.21761897
=1.0128

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)
=(146 / 6493) / (457 / 6461)
=0.28184198 / 0.22055409
=1.2779

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 - (2898 + 338) / 7887) / (1 - (3212 + 398) / 8610)
=0.58970458 / 0.58072009
=1.0155

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
=6461 / 6493
=0.9951

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))
=(270 / (270 + 398)) / (302 / (302 + 338))
=0.40419162 / 0.471875
=0.8566

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)
=(1076 / 6461) / (917 / 6493)
=0.16653769 / 0.14122902
=1.1792

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)
=((3243 + 1835) / 7887) / ((3660 + 2008) / 8610)
=0.6438443 / 0.6583043
=0.978

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
=(-173 - -25 - 705) / 7887
=-0.1082

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 -2.87 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 0.7751.0590.73161.1311.01390.99020.93051.16980.9740.9492
GMI 1.01440.96680.94011.16250.91111.16920.62611.01021.08141.14
AQI 0.80680.95381.13231.0760.94861.45430.85971.0111.41231.0483
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 1.07680.96761.03960.85160.9611.31881.32281.12461.00381.0211
TATA -0.018-0.0172-0.0313-0.0535-0.0259-0.10190.1050.0211-0.0346-0.105
M-score -2.86-2.46-2.80-2.57-2.60-2.74-2.33-2.22-2.42-2.99

NCR Corp Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 1.12021.16981.18651.0960.98320.9740.93360.92951.01280.9492
GMI 0.73571.01021.00481.00351.03851.08141.10091.37161.27791.14
AQI 1.04261.0111.14911.16031.21111.41231.03841.01491.01551.0483
SGI 1.07141.06861.05681.05511.06531.07641.0511.02220.99510.9669
DEPI 0.96560.94290.92920.92570.89630.88930.81840.84350.85660.8543
SGAI 0.841.09851.0761.04641.03961.07941.06411.17571.17921.0649
LVGI 1.10851.12461.15361.12521.14191.00380.9621.00450.9781.0211
TATA 0.05470.02110.01840.0061-0.0134-0.0346-0.0422-0.1095-0.1082-0.105
M-score -2.18-2.22-2.18-2.30-2.46-2.42-2.64-2.88-2.87-2.99
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