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NASDAQ OMX Group, Inc. (NAS:NDAQ)
Beneish M-Score
-2.85 (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 -2.85 suggests that the company is not a manipulator.

NDAQ' s 10-Year Beneish M-Score Range
Min: -9.15   Max: -0.66
Current: -2.85

-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 -2.57.


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 * 0.7709+0.528 * 1.0086+0.404 * 0.954+0.892 * 1.0282+0.115 * 1.0066
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0244+4.679 * -0.0311-0.327 * 1.0758
=-2.85

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was $344 Mil.
Revenue was 858 + 920 + 818 + 865 = $3,461 Mil.
Gross Profit was 507 + 518 + 497 + 523 = $2,045 Mil.
Total Current Assets was $3,688 Mil.
Total Assets was $12,242 Mil.
Property, Plant and Equipment(Net PPE) was $281 Mil.
Depreciation, Depletion and Amortization(DDA) was $136 Mil.
Selling, General & Admin. Expense(SGA) was $1,107 Mil.
Total Current Liabilities was $3,440 Mil.
Long-Term Debt was $2,306 Mil.
Net Income was 9 + 86 + 123 + 101 = $319 Mil.
Non Operating Income was 14 + -49 + 0 + 0 = $-35 Mil.
Cash Flow from Operations was 231 + 280 + 24 + 200 = $735 Mil.
Accounts Receivable was $434 Mil.
Revenue was 898 + 849 + 805 + 814 = $3,366 Mil.
Gross Profit was 529 + 520 + 506 + 451 = $2,006 Mil.
Total Current Assets was $3,519 Mil.
Total Assets was $12,978 Mil.
Property, Plant and Equipment(Net PPE) was $266 Mil.
Depreciation, Depletion and Amortization(DDA) was $130 Mil.
Selling, General & Admin. Expense(SGA) was $1,051 Mil.
Total Current Liabilities was $3,578 Mil.
Long-Term Debt was $2,084 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)
=(344 / 3461) / (434 / 3366)
=0.09939324 / 0.12893642
=0.7709

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)
=(518 / 3366) / (507 / 3461)
=0.5959596 / 0.59086969
=1.0086

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 - (3688 + 281) / 12242) / (1 - (3519 + 266) / 12978)
=0.67578827 / 0.7083526
=0.954

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
=3461 / 3366
=1.0282

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))
=(130 / (130 + 266)) / (136 / (136 + 281))
=0.32828283 / 0.32613909
=1.0066

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)
=(1107 / 3461) / (1051 / 3366)
=0.31984975 / 0.31224005
=1.0244

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)
=((2306 + 3440) / 12242) / ((2084 + 3578) / 12978)
=0.46936775 / 0.43627678
=1.0758

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
=(319 - -35 - 735) / 12242
=-0.0311

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 -2.85 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

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 1.18891.08351.17921.16751.14641.24460.97680.90420.90810.7709
GMI 0.91420.89790.89710.90710.90940.92010.91490.95490.99931.0086
AQI 1.56670.97450.93020.88620.89390.88370.91150.94960.95510.954
SGI 0.90940.89470.90020.97441.02951.11.1171.10011.091.0282
DEPI 1.09321.08631.08821.07911.05540.99950.98610.97530.97961.0066
SGAI 1.08791.19791.21981.20281.22941.051.04280.97530.95231.0244
LVGI 0.54381.02431.2871.39971.36911.3621.04971.01281.0221.0758
TATA -0.0204-0.0296-0.0168-0.0187-0.0162-0.0144-0.0204-0.0158-0.0186-0.0311
M-score -2.15-2.73-2.69-2.69-2.64-2.45-2.60-2.60-2.59-2.85
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