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NASDAQ OMX Group, Inc. (NAS:NDAQ)
Beneish M-Score
-2.59 (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 -2.59 suggests that the company is not a manipulator.

NDAQ' s 10-Year Beneish M-Score Range
Min: -9.15   Max: -1.01
Current: -2.59

-9.15
-1.01

During the past 13 years, the highest Beneish M-Score of NASDAQ OMX Group, Inc. was -1.01. 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 * 0.9081+0.528 * 0.9993+0.404 * 0.9551+0.892 * 1.09+0.115 * 0.9796
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9523+4.679 * -0.0186-0.327 * 1.022
=-2.59

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $389 Mil.
Revenue was 920 + 818 + 865 + 898 = $3,501 Mil.
Gross Profit was 518 + 497 + 523 + 529 = $2,067 Mil.
Total Current Assets was $3,400 Mil.
Total Assets was $12,087 Mil.
Property, Plant and Equipment(Net PPE) was $292 Mil.
Depreciation, Depletion and Amortization(DDA) was $137 Mil.
Selling, General & Admin. Expense(SGA) was $1,093 Mil.
Total Current Liabilities was $2,980 Mil.
Long-Term Debt was $2,313 Mil.
Net Income was 86 + 123 + 101 + 103 = $413 Mil.
Non Operating Income was -49 + 0 + 0 + 0 = $-49 Mil.
Cash Flow from Operations was 280 + 24 + 200 + 183 = $687 Mil.
Accounts Receivable was $393 Mil.
Revenue was 849 + 805 + 814 + 744 = $3,212 Mil.
Gross Profit was 520 + 506 + 451 + 418 = $1,895 Mil.
Total Current Assets was $3,163 Mil.
Total Assets was $12,577 Mil.
Property, Plant and Equipment(Net PPE) was $268 Mil.
Depreciation, Depletion and Amortization(DDA) was $122 Mil.
Selling, General & Admin. Expense(SGA) was $1,053 Mil.
Total Current Liabilities was $2,800 Mil.
Long-Term Debt was $2,589 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)
=(389 / 3501) / (393 / 3212)
=0.11111111 / 0.12235367
=0.9081

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)
=(497 / 3212) / (518 / 3501)
=0.58997509 / 0.59040274
=0.9993

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 - (3400 + 292) / 12087) / (1 - (3163 + 268) / 12577)
=0.69454786 / 0.72720045
=0.9551

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
=3501 / 3212
=1.09

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))
=(122 / (122 + 268)) / (137 / (137 + 292))
=0.31282051 / 0.31934732
=0.9796

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)
=(1093 / 3501) / (1053 / 3212)
=0.31219652 / 0.32783313
=0.9523

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)
=((2313 + 2980) / 12087) / ((2589 + 2800) / 12577)
=0.4379085 / 0.42848056
=1.022

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
=(413 - -49 - 687) / 12087
=-0.0186

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 -2.59 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

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 0.99331.18891.08351.17921.16751.14641.24460.97680.90420.9081
GMI 0.94130.91420.89790.89710.90710.90940.92010.91490.95490.9993
AQI 1.49031.56670.97450.93020.88620.89390.88370.91150.94960.9551
SGI 0.94870.90940.89470.90020.97441.02951.11.1171.10011.09
DEPI 1.15431.09321.08631.08821.07911.05540.99950.98610.97530.9796
SGAI 1.12651.08791.19791.21981.20281.22941.051.04280.97530.9523
LVGI 0.56660.54381.02431.2871.39971.36911.3621.04971.01281.022
TATA -0.0191-0.0204-0.0296-0.0168-0.0187-0.0162-0.0144-0.0204-0.0158-0.0186
M-score -2.32-2.15-2.73-2.69-2.69-2.64-2.45-2.60-2.60-2.59
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