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Nielsen Holdings PLC (NYSE:NLSN)
Beneish M-Score
-2.74 (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.

Nielsen Holdings PLC has a M-score of -2.74 suggests that the company is not a manipulator.

NLSN' s Beneish M-Score Range Over the Past 10 Years
Min: -2.74   Max: -2.38
Current: -2.74

-2.74
-2.38

During the past 7 years, the highest Beneish M-Score of Nielsen Holdings PLC was -2.38. The lowest was -2.74. And the median was -2.51.


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 Nielsen Holdings PLC 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 * 0.9916+0.528 * 0.9837+0.404 * 0.9923+0.892 * 0.9864+0.115 * 0.9575
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9819+4.679 * -0.0414-0.327 * 1.1078
=-2.74

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $1,163 Mil.
Revenue was 1531 + 1559 + 1458 + 1633 = $6,181 Mil.
Gross Profit was 916 + 911 + 836 + 980 = $3,643 Mil.
Total Current Assets was $2,106 Mil.
Total Assets was $15,277 Mil.
Property, Plant and Equipment(Net PPE) was $486 Mil.
Depreciation, Depletion and Amortization(DDA) was $580 Mil.
Selling, General & Admin. Expense(SGA) was $1,883 Mil.
Total Current Liabilities was $1,755 Mil.
Long-Term Debt was $7,114 Mil.
Net Income was 142 + 114 + 63 + 161 = $480 Mil.
Non Operating Income was 5 + -6 + -26 + -39 = $-66 Mil.
Cash Flow from Operations was 452 + 251 + 75 + 401 = $1,179 Mil.
Accounts Receivable was $1,189 Mil.
Revenue was 1572 + 1594 + 1489 + 1611 = $6,266 Mil.
Gross Profit was 924 + 917 + 847 + 945 = $3,633 Mil.
Total Current Assets was $1,982 Mil.
Total Assets was $15,361 Mil.
Property, Plant and Equipment(Net PPE) was $525 Mil.
Depreciation, Depletion and Amortization(DDA) was $571 Mil.
Selling, General & Admin. Expense(SGA) was $1,944 Mil.
Total Current Liabilities was $1,542 Mil.
Long-Term Debt was $6,508 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)
=(1163 / 6181) / (1189 / 6266)
=0.18815726 / 0.18975423
=0.9916

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)
=(911 / 6266) / (916 / 6181)
=0.57979572 / 0.58938683
=0.9837

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 - (2106 + 486) / 15277) / (1 - (1982 + 525) / 15361)
=0.83033318 / 0.83679448
=0.9923

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
=6181 / 6266
=0.9864

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))
=(571 / (571 + 525)) / (580 / (580 + 486))
=0.5209854 / 0.54409006
=0.9575

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)
=(1883 / 6181) / (1944 / 6266)
=0.30464326 / 0.31024577
=0.9819

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)
=((7114 + 1755) / 15277) / ((6508 + 1542) / 15361)
=0.58054592 / 0.52405442
=1.1078

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
=(480 - -66 - 1179) / 15277
=-0.0414

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.

Nielsen Holdings PLC has a M-score of -2.74 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.

Nielsen Holdings PLC Annual Data

Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.00181.05151.02160.9411
GMI 0.97251.01211.01550.9935
AQI 0.9961.00410.97621.0091
SGI 1.15060.97741.05471.1026
DEPI 1.04670.96550.9990.9303
SGAI 1.07740.93420.99810.9579
LVGI 0.82250.95480.94471.0397
TATA -0.0233-0.0258-0.0082-0.035
M-score -2.42-2.54-2.43-2.62

Nielsen Holdings PLC Quarterly Data

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
DSRI 1.01621.03851.03311.02341.03660.92260.94110.92440.94720.9916
GMI 1.01851.01431.0191.00981.00861.00530.99350.9940.98730.9837
AQI 0.93180.97440.97620.98791.06311.01551.00910.99010.99080.9923
SGI 0.99761.01561.0431.0771.10621.13251.10261.06541.02320.9864
DEPI 0.96221.01420.9990.97740.96870.91630.93030.94950.95830.9575
SGAI 0.9820.98461.00421.00050.99570.98710.95790.96230.96810.9819
LVGI 0.90610.94960.94470.98141.01060.99281.03971.08161.09531.1078
TATA -0.0118-0.0088-0.0082-0.0087-0.0285-0.0326-0.035-0.0339-0.0367-0.0414
M-score -2.51-2.45-2.43-2.43-2.46-2.58-2.62-2.68-2.72-2.74
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