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Nasdaq Inc (NAS:NDAQ)
Beneish M-Score
-2.62 (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 -2.62 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: -2.62

-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 -2.61.


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 * 0.9717+0.528 * 0.9624+0.404 * 0.9352+0.892 * 0.9962+0.115 * 1.0749
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9251+4.679 * -0.0117-0.327 * 1.0863
=-2.62

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $333 Mil.
Revenue was 905 + 865 + 871 + 807 = $3,448 Mil.
Gross Profit was 534 + 536 + 529 + 518 = $2,117 Mil.
Total Current Assets was $4,722 Mil.
Total Assets was $13,717 Mil.
Property, Plant and Equipment(Net PPE) was $326 Mil.
Depreciation, Depletion and Amortization(DDA) was $142 Mil.
Selling, General & Admin. Expense(SGA) was $988 Mil.
Total Current Liabilities was $4,429 Mil.
Long-Term Debt was $2,565 Mil.
Net Income was 132 + 148 + 138 + 133 = $551 Mil.
Non Operating Income was 3 + 1 + 2 + 1 = $7 Mil.
Cash Flow from Operations was 251 + 213 + 66 + 175 = $705 Mil.
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 $1,072 Mil.
Total Current Liabilities was $3,440 Mil.
Long-Term Debt was $2,306 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)
=(333 / 3448) / (344 / 3461)
=0.09657773 / 0.09939324
=0.9717

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)
=(2045 / 3461) / (2117 / 3448)
=0.59086969 / 0.61397912
=0.9624

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 - (4722 + 326) / 13717) / (1 - (3688 + 281) / 12242)
=0.6319895 / 0.67578827
=0.9352

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
=3448 / 3461
=0.9962

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 + 281)) / (142 / (142 + 326))
=0.32613909 / 0.3034188
=1.0749

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)
=(988 / 3448) / (1072 / 3461)
=0.28654292 / 0.30973707
=0.9251

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)
=((2565 + 4429) / 13717) / ((2306 + 3440) / 12242)
=0.50987825 / 0.46936775
=1.0863

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
=(551 - 7 - 705) / 13717
=-0.0117

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 -2.62 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 0.59630.72780.90730.95031.05570.96111.19171.14640.90810.8355
GMI 1.44171.24390.8330.93890.89530.96850.92190.90350.99930.9616
AQI 0.55551.14881.35331.19720.69331.11721.56670.89390.95451.0025
SGI 1.8841.46981.49750.93430.93781.07540.90721.02951.090.9723
DEPI 0.68741.38471.11940.86571.00591.06881.09321.05540.97961.0668
SGAI 0.70350.68931.14981.06281.19941.00461.06841.2470.95310.9862
LVGI 0.71240.33823.25380.76121.45910.89590.54381.36911.02031.0237
TATA -0.0373-0.0397-0.0017-0.018-0.002-0.0189-0.0205-0.0161-0.0186-0.0231
M-score -2.07-1.99-2.82-2.57-2.86-2.47-2.15-2.64-2.59-2.78

Nasdaq Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.14641.24460.97680.90420.90810.77090.82110.74570.83620.9717
GMI 0.90940.92010.91490.95490.99931.00861.01451.00610.96070.9624
AQI 0.89390.88370.91150.94960.95450.9540.99391.01231.00250.9352
SGI 1.02951.11.1171.10011.091.02820.99591.00760.97140.9962
DEPI 1.05540.99950.98610.97530.97961.00661.04131.05581.06681.0749
SGAI 1.22941.051.04280.97530.95230.9920.96380.97120.95590.9251
LVGI 1.36911.3621.04971.01281.02031.07581.00841.02541.02371.0863
TATA -0.0162-0.0144-0.0204-0.0158-0.0186-0.0311-0.0269-0.0301-0.0232-0.0117
M-score -2.64-2.45-2.60-2.60-2.59-2.85-2.76-2.84-2.78-2.62
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