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NASDAQ OMX Group, Inc. (NAS:NDAQ)
Beneish M-Score
-2.45 (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 -2.45 suggests that the company is not a manipulator.

NDAQ' s 10-Year Beneish M-Score Range
Min: -9.15   Max: -0.66
Current: -2.45

-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 -2.46.


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 * 1.2446+0.528 * 0.9201+0.404 * 0.8837+0.892 * 1.1+0.115 * 0.9995
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.05+4.679 * -0.0144-0.327 * 1.362
=-2.45

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
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.
Net Income was 103 + 141 + 113 + 88 = $445 Mil.
Non Operating Income was 0 + 25 + -1 + 0 = $24 Mil.
Cash Flow from Operations was 183 + 237 + 82 + 106 = $608 Mil.
Accounts Receivable was $317 Mil.
Revenue was 744 + 755 + 746 + 815 = $3,060 Mil.
Gross Profit was 418 + 421 + 412 + 427 = $1,678 Mil.
Total Current Assets was $1,608 Mil.
Total Assets was $9,188 Mil.
Property, Plant and Equipment(Net PPE) was $215 Mil.
Depreciation, Depletion and Amortization(DDA) was $105 Mil.
Selling, General & Admin. Expense(SGA) was $910 Mil.
Total Current Liabilities was $1,114 Mil.
Long-Term Debt was $1,829 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)
=(434 / 3366) / (317 / 3060)
=0.12893642 / 0.10359477
=1.2446

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)
=(520 / 3060) / (529 / 3366)
=0.54836601 / 0.5959596
=0.9201

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 - (3519 + 266) / 12978) / (1 - (1608 + 215) / 9188)
=0.7083526 / 0.80158903
=0.8837

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
=3366 / 3060
=1.1

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))
=(105 / (105 + 215)) / (130 / (130 + 266))
=0.328125 / 0.32828283
=0.9995

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)
=(1051 / 3366) / (910 / 3060)
=0.31224005 / 0.29738562
=1.05

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)
=((2084 + 3578) / 12978) / ((1829 + 1114) / 9188)
=0.43627678 / 0.3203091
=1.362

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
=(445 - 24 - 608) / 12978
=-0.0144

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 -2.45 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.98471.18640.59630.72780.90690.95011.05830.96151.18861.1467
GMI 1.11521.51.44171.24390.83340.9390.89660.96880.9140.9091
AQI 3.11692.25050.55551.14881.35331.19720.69331.11721.56670.8939
SGI 0.91621.62811.8841.46981.4980.93450.93551.07490.90961.0292
DEPI 0.88540.85240.68741.38471.11610.86831.00591.06881.09321.0554
SGAI 0.96060.5260.70350.68931.1021.15911.14081.00331.09021.2309
LVGI 0.98381.27020.71240.33823.25380.76121.45910.89590.54381.3691
TATA -0.0737-0.0085-0.0371-0.03970.0128-0.018-0.002-0.0189-0.0205-0.0161
M-score -2.00-1.04-2.07-1.99-2.75-2.59-2.85-2.46-2.16-2.64

NASDAQ OMX Group, Inc. Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 0.96130.94590.92940.99331.18891.08351.17921.16751.14641.2446
GMI 0.96920.98561.0030.94130.91420.89790.89710.90710.90940.9201
AQI 1.11721.92371.52911.49031.56670.97450.93020.88620.89390.8837
SGI 1.07521.05721.06650.94870.90940.89470.90020.97441.02951.1
DEPI 1.06881.0871.11491.15431.09321.08631.08821.07911.05540.9995
SGAI 1.00411.06511.0411.12651.08791.19791.21981.20281.22941.05
LVGI 0.89590.47290.58580.56660.54381.02431.2871.39971.36911.362
TATA -0.0189-0.0235-0.0149-0.0191-0.0204-0.0296-0.0168-0.0187-0.0162-0.0144
M-score -2.46-2.05-2.20-2.32-2.15-2.73-2.69-2.69-2.64-2.45
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