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NASDAQ OMX Group, Inc. (NAS:NDAQ)
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.

NASDAQ OMX Group, Inc. has a M-score of -2.77 suggests that the company is not a manipulator.

NDAQ' s 10-Year Beneish M-Score Range
Min: -9.15   Max: -0.66
Current: -2.77

-9.15
-0.66

During the past 13 years, the highest Beneish M-Score of NASDAQ OMX Group, Inc. was -0.66. The lowest was -9.15. 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 NASDAQ OMX Group, 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 * 0.8211+0.528 * 1.0145+0.404 * 0.9939+0.892 * 0.9959+0.115 * 1.0413
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9959+4.679 * -0.0269-0.327 * 1.0084
=-2.77

* 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 $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 $1,086 Mil.
Total Current Liabilities was $3,146 Mil.
Long-Term Debt was $2,281 Mil.
Net Income was 133 + 9 + 86 + 123 = $351 Mil.
Non Operating Income was 1 + 14 + -49 + 0 = $-34 Mil.
Cash Flow from Operations was 175 + 231 + 280 + 24 = $710 Mil.
Accounts Receivable was $395 Mil.
Revenue was 865 + 898 + 849 + 805 = $3,417 Mil.
Gross Profit was 523 + 529 + 520 + 506 = $2,078 Mil.
Total Current Assets was $3,718 Mil.
Total Assets was $13,116 Mil.
Property, Plant and Equipment(Net PPE) was $280 Mil.
Depreciation, Depletion and Amortization(DDA) was $136 Mil.
Selling, General & Admin. Expense(SGA) was $1,095 Mil.
Total Current Liabilities was $3,424 Mil.
Long-Term Debt was $2,408 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)
=(323 / 3403) / (395 / 3417)
=0.09491625 / 0.11559848
=0.8211

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)
=(507 / 3417) / (518 / 3403)
=0.60813579 / 0.59947105
=1.0145

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 - (3446 + 295) / 12104) / (1 - (3718 + 280) / 13116)
=0.69092862 / 0.69518146
=0.9939

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
=3403 / 3417
=0.9959

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))
=(136 / (136 + 280)) / (135 / (135 + 295))
=0.32692308 / 0.31395349
=1.0413

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)
=(1086 / 3403) / (1095 / 3417)
=0.31913018 / 0.32045654
=0.9959

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)
=((2281 + 3146) / 12104) / ((2408 + 3424) / 13116)
=0.44836418 / 0.44464776
=1.0084

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
=(351 - -34 - 710) / 12104
=-0.0269

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 OMX Group, Inc. 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.

NASDAQ OMX Group, Inc. Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.22320.59630.72780.90690.95011.05830.96151.18861.14670.9081
GMI 1.51.44171.24390.83340.9390.89660.96880.9140.90910.9993
AQI 2.25050.55551.14881.35331.19720.69331.11721.56670.89390.9551
SGI 1.62811.8841.46981.4980.93450.93551.07490.90961.02921.09
DEPI 0.85240.68741.38471.11610.86831.00591.06881.09321.05540.9796
SGAI 0.5260.70350.68931.1021.15911.14081.00331.09021.23090.9531
LVGI 1.27020.71240.33823.25380.76121.45910.89590.54381.36911.022
TATA -0.0085-0.0371-0.03970.0128-0.018-0.002-0.0189-0.0205-0.0161-0.0185
M-score -1.01-2.07-1.99-2.75-2.59-2.85-2.46-2.16-2.64-2.59

NASDAQ OMX Group, Inc. Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 1.08351.17921.16751.14641.24460.97680.90420.90810.77090.8211
GMI 0.89790.89710.90710.90940.92010.91490.95490.99931.00861.0145
AQI 0.97450.93020.88620.89390.88370.91150.94960.95510.9540.9939
SGI 0.89470.90020.97441.02951.11.1171.10011.091.02820.9959
DEPI 1.08631.08821.07911.05540.99950.98610.97530.97961.00661.0413
SGAI 1.19791.21981.20281.22941.051.04280.97530.95231.02440.9959
LVGI 1.02431.2871.39971.36911.3621.04971.01281.0221.07581.0084
TATA -0.0296-0.0168-0.0187-0.0162-0.0144-0.0204-0.0158-0.0186-0.0311-0.0269
M-score -2.73-2.69-2.69-2.64-2.45-2.60-2.60-2.59-2.85-2.77
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