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NASDAQ OMX Group, Inc. (NAS:NDAQ)
Beneish M-Score
-2.60 (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 -2.60 suggests that the company is not a manipulator.

NDAQ' s 10-Year Beneish M-Score Range
Min: -9.15   Max: -0.66
Current: -2.6

-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 -2.48.


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 * 0.9033+0.528 * 0.9548+0.404 * 0.9496+0.892 * 1.1011+0.115 * 0.9753
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9763+4.679 * -0.0158-0.327 * 1.0128
=-2.60

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $370 Mil.
Revenue was 818 + 865 + 898 + 849 = $3,430 Mil.
Gross Profit was 497 + 523 + 529 + 520 = $2,069 Mil.
Total Current Assets was $3,557 Mil.
Total Assets was $12,692 Mil.
Property, Plant and Equipment(Net PPE) was $288 Mil.
Depreciation, Depletion and Amortization(DDA) was $138 Mil.
Selling, General & Admin. Expense(SGA) was $1,075 Mil.
Total Current Liabilities was $3,194 Mil.
Long-Term Debt was $2,345 Mil.
Net Income was 123 + 101 + 103 + 141 = $468 Mil.
Non Operating Income was 0 + 0 + 0 + 25 = $25 Mil.
Cash Flow from Operations was 24 + 200 + 183 + 237 = $644 Mil.
Accounts Receivable was $372 Mil.
Revenue was 805 + 814 + 744 + 752 = $3,115 Mil.
Gross Profit was 506 + 451 + 418 + 419 = $1,794 Mil.
Total Current Assets was $3,072 Mil.
Total Assets was $12,486 Mil.
Property, Plant and Equipment(Net PPE) was $249 Mil.
Depreciation, Depletion and Amortization(DDA) was $115 Mil.
Selling, General & Admin. Expense(SGA) was $1,000 Mil.
Total Current Liabilities was $2,707 Mil.
Long-Term Debt was $2,673 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)
=(370 / 3430) / (372 / 3115)
=0.10787172 / 0.11942215
=0.9033

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)
=(523 / 3115) / (497 / 3430)
=0.57592295 / 0.603207
=0.9548

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 - (3557 + 288) / 12692) / (1 - (3072 + 249) / 12486)
=0.69705326 / 0.7340221
=0.9496

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
=3430 / 3115
=1.1011

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))
=(115 / (115 + 249)) / (138 / (138 + 288))
=0.31593407 / 0.32394366
=0.9753

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)
=(1075 / 3430) / (1000 / 3115)
=0.31341108 / 0.32102729
=0.9763

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)
=((2345 + 3194) / 12692) / ((2673 + 2707) / 12486)
=0.43641664 / 0.43088259
=1.0128

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
=(468 - 25 - 644) / 12692
=-0.0158

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 -2.60 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 0.98471.18640.59630.72780.90610.95161.05570.96111.19171.1464
GMI 1.11521.51.44171.24390.8330.93890.89530.96850.92190.9035
AQI 3.11692.25050.55551.14881.34711.18860.70151.11841.56490.8939
SGI 0.91621.62811.8841.46981.49750.93430.93781.07540.90721.0295
DEPI 0.88110.85660.68741.38471.11920.86591.00591.06881.09321.0554
SGAI 0.96060.5260.70350.68931.14981.06281.19941.00461.06841.247
LVGI 0.98381.27020.71240.33823.25910.76211.45510.8950.54431.3691
TATA -0.0737-0.0085-0.0371-0.0397-0.0018-0.018-0.002-0.0189-0.0205-0.0161
M-score -2.00-1.04-2.07-1.99-2.83-2.57-2.85-2.46-2.15-2.64

NASDAQ OMX Group, Inc. Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.93451.00211.19171.08341.18471.17011.1461.24540.97490.9033
GMI 1.00440.94320.92190.90340.89450.90230.90370.91520.9140.9548
AQI 1.52911.49031.56490.97450.93020.88620.89390.88370.91150.9496
SGI 1.06070.94040.90720.89480.89610.97221.02981.09931.11921.1011
DEPI 1.11491.08071.09321.08631.08821.07911.05540.99950.98610.9753
SGAI 1.00771.07481.06471.18451.22181.21291.24541.061.04640.9763
LVGI 0.58580.56660.54431.02431.2871.39971.36911.3621.04971.0128
TATA -0.0149-0.0191-0.0204-0.0296-0.0168-0.0187-0.0162-0.0144-0.0204-0.0158
M-score -2.19-2.31-2.15-2.73-2.69-2.69-2.65-2.45-2.60-2.60
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