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Nasdaq Inc (NAS:NDAQ)
Beneish M-Score
-2.41 (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 -2.41 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: -2.41

-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 * 1.2065+0.528 * 0.9738+0.404 * 0.9685+0.892 * 1.0405+0.115 * 0.9586
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0222+4.679 * -0.0131-0.327 * 1.1685
=-2.41

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $349 Mil.
Revenue was 929 + 897 + 905 + 865 = $3,596 Mil.
Gross Profit was 585 + 559 + 534 + 536 = $2,214 Mil.
Total Current Assets was $4,346 Mil.
Total Assets was $14,808 Mil.
Property, Plant and Equipment(Net PPE) was $342 Mil.
Depreciation, Depletion and Amortization(DDA) was $161 Mil.
Selling, General & Admin. Expense(SGA) was $1,070 Mil.
Total Current Liabilities was $4,054 Mil.
Long-Term Debt was $3,689 Mil.
Net Income was 131 + 70 + 132 + 148 = $481 Mil.
Non Operating Income was 2 + 3 + 3 + 1 = $9 Mil.
Cash Flow from Operations was 61 + 141 + 251 + 213 = $666 Mil.
Accounts Receivable was $278 Mil.
Revenue was 871 + 807 + 858 + 920 = $3,456 Mil.
Gross Profit was 529 + 518 + 507 + 518 = $2,072 Mil.
Total Current Assets was $3,160 Mil.
Total Assets was $11,770 Mil.
Property, Plant and Equipment(Net PPE) was $305 Mil.
Depreciation, Depletion and Amortization(DDA) was $135 Mil.
Selling, General & Admin. Expense(SGA) was $1,006 Mil.
Total Current Liabilities was $2,852 Mil.
Long-Term Debt was $2,415 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)
=(349 / 3596) / (278 / 3456)
=0.09705228 / 0.08043981
=1.2065

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)
=(2072 / 3456) / (2214 / 3596)
=0.59953704 / 0.61568409
=0.9738

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 - (4346 + 342) / 14808) / (1 - (3160 + 305) / 11770)
=0.68341437 / 0.70560748
=0.9685

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
=3596 / 3456
=1.0405

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 + 305)) / (161 / (161 + 342))
=0.30681818 / 0.32007952
=0.9586

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)
=(1070 / 3596) / (1006 / 3456)
=0.29755284 / 0.29108796
=1.0222

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)
=((3689 + 4054) / 14808) / ((2415 + 2852) / 11770)
=0.52289303 / 0.44749363
=1.1685

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
=(481 - 9 - 666) / 14808
=-0.0131

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 -2.41 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 local exchange's currency.

Nasdaq Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.59630.72780.90610.9511.05830.95931.19171.14640.90810.8355
GMI 1.44171.24390.8330.93940.89660.96650.92190.90350.99930.9616
AQI 0.55551.14881.34711.20270.69331.11721.56670.89390.95451.0054
SGI 1.8841.46981.49750.93490.93551.07740.90721.02951.090.9723
DEPI 0.68741.38471.11920.86591.00591.06881.09321.05540.97961.0668
SGAI 0.70350.68931.14981.11091.14081.01051.06841.2470.95310.9862
LVGI 0.71240.33823.25910.761.45910.89590.54381.36911.02031.0191
TATA -0.0373-0.0397-0.0017-0.018-0.002-0.0189-0.0205-0.0161-0.0186-0.0231
M-score -2.07-1.99-2.83-2.57-2.85-2.47-2.15-2.64-2.59-2.78

Nasdaq Inc Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 0.97490.90330.90810.77090.82110.74570.83620.97171.18821.2065
GMI 0.9140.95480.99931.00861.01451.00610.96070.96240.98280.9738
AQI 0.91150.94960.95450.9540.99391.01231.00540.93520.97490.9685
SGI 1.11921.10111.091.02820.99591.00760.97140.99621.03971.0405
DEPI 0.98610.97530.97961.00661.04131.05581.06681.07491.00880.9586
SGAI 1.04640.97630.95230.9920.94270.92880.98890.95790.96651.0222
LVGI 1.04971.01281.02031.07581.00841.02541.01911.08631.18751.1685
TATA -0.0204-0.0158-0.0186-0.0311-0.0269-0.0301-0.0232-0.0117-0.0127-0.0131
M-score -2.60-2.60-2.59-2.85-2.76-2.83-2.78-2.62-2.40-2.41
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