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Nasdaq Inc (NAS:NDAQ)
Beneish M-Score
-2.40 (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.

Nasdaq Inc has a M-score of -2.40 suggests that the company is not a manipulator.

NDAQ' s Beneish M-Score Range Over the Past 10 Years
Min: -3.96   Max: -0.74
Current: -2.4

-3.96
-0.74

During the past 13 years, the highest Beneish M-Score of Nasdaq Inc was -0.74. The lowest was -3.96. 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 Nasdaq Inc 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 * 1.1882+0.528 * 0.9828+0.404 * 0.9749+0.892 * 1.0397+0.115 * 1.0088
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9123+4.679 * -0.0127-0.327 * 1.1875
=-2.40

* 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 $399 Mil.
Revenue was 897 + 905 + 865 + 871 = $3,538 Mil.
Gross Profit was 559 + 534 + 536 + 529 = $2,158 Mil.
Total Current Assets was $4,596 Mil.
Total Assets was $15,099 Mil.
Property, Plant and Equipment(Net PPE) was $332 Mil.
Depreciation, Depletion and Amortization(DDA) was $150 Mil.
Selling, General & Admin. Expense(SGA) was $975 Mil.
Total Current Liabilities was $4,308 Mil.
Long-Term Debt was $3,731 Mil.
Net Income was 70 + 132 + 148 + 138 = $488 Mil.
Non Operating Income was 3 + 3 + 1 + 2 = $9 Mil.
Cash Flow from Operations was 141 + 251 + 213 + 66 = $671 Mil.
Accounts Receivable was $323 Mil.
Revenue was 807 + 858 + 920 + 818 = $3,403 Mil.
Gross Profit was 518 + 507 + 518 + 497 = $2,040 Mil.
Total Current Assets was $3,446 Mil.
Total Assets was $12,104 Mil.
Property, Plant and Equipment(Net PPE) was $295 Mil.
Depreciation, Depletion and Amortization(DDA) was $135 Mil.
Selling, General & Admin. Expense(SGA) was $1,028 Mil.
Total Current Liabilities was $3,146 Mil.
Long-Term Debt was $2,281 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)
=(399 / 3538) / (323 / 3403)
=0.11277558 / 0.09491625
=1.1882

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)
=(2040 / 3403) / (2158 / 3538)
=0.59947105 / 0.60994912
=0.9828

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 - (4596 + 332) / 15099) / (1 - (3446 + 295) / 12104)
=0.67362077 / 0.69092862
=0.9749

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
=3538 / 3403
=1.0397

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))
=(135 / (135 + 295)) / (150 / (150 + 332))
=0.31395349 / 0.31120332
=1.0088

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)
=(975 / 3538) / (1028 / 3403)
=0.27557942 / 0.30208639
=0.9123

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)
=((3731 + 4308) / 15099) / ((2281 + 3146) / 12104)
=0.53241937 / 0.44836418
=1.1875

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
=(488 - 9 - 671) / 15099
=-0.0127

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.

Nasdaq Inc has a M-score of -2.40 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.

Nasdaq Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.59630.72780.90690.95011.05830.95931.19141.14670.90810.8355
GMI 1.44171.24390.83340.9390.89660.96650.91620.90910.99930.9616
AQI 0.55551.14881.35331.19720.69331.11721.56670.89390.95451.0025
SGI 1.8841.46981.4980.93450.93551.07740.90751.02921.090.9723
DEPI 0.68741.38471.11610.86831.00591.06881.09321.05540.97961.0668
SGAI 0.70350.68931.1021.15911.14081.01051.08241.23090.95310.9862
LVGI 0.71240.33823.25380.76121.45910.89590.54381.36911.02031.0237
TATA -0.0373-0.03970.0128-0.018-0.002-0.0189-0.0198-0.0161-0.0186-0.0231
M-score -2.07-1.99-2.75-2.59-2.85-2.47-2.15-2.64-2.59-2.78

Nasdaq Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 1.24460.97680.90420.90810.77090.82110.74570.83620.97171.1882
GMI 0.92010.91490.95490.99931.00861.01451.00610.96070.96240.9828
AQI 0.88370.91150.94960.95450.9540.99391.01231.00250.93520.9749
SGI 1.11.1171.10011.091.02820.99591.00760.97140.99621.0397
DEPI 0.99950.98610.97530.97961.00661.04131.05581.06681.07491.0088
SGAI 1.051.04280.97530.95230.9920.94270.950.93430.90360.9123
LVGI 1.3621.04971.01281.02031.07581.00841.02541.02371.08631.1875
TATA -0.0144-0.0204-0.0158-0.0186-0.0311-0.0269-0.0301-0.0232-0.0117-0.0127
M-score -2.45-2.60-2.60-2.59-2.85-2.76-2.83-2.77-2.61-2.40
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