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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.
During the past 13 years, the highest Beneish M-Score of Nokia Oyj was 316315.23. The lowest was -3.87. And the median was -2.21.
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 Nokia Oyj 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 * 1.3764||+||0.528 * 1.1402||+||0.404 * 1.3658||+||0.892 * 1.3372||+||0.115 * 0.3261|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.2378||+||4.679 * 0.0422||-||0.327 * 0.8477|
|This Year (Jun16) TTM:||Last Year (Jun15) TTM:|
|Accounts Receivable was $7,440 Mil.|
Revenue was 6273.03370787 + 6123.60801782 + 3931.37254902 + 3407.40740741 = $19,735 Mil.
Gross Profit was 2278.65168539 + 1730.51224944 + 1844.22657952 + 1455.667789 = $7,309 Mil.
Total Current Assets was $25,281 Mil.
Total Assets was $51,417 Mil.
Property, Plant and Equipment(Net PPE) was $2,207 Mil.
Depreciation, Depletion and Amortization(DDA) was $914 Mil.
Selling, General & Admin. Expense(SGA) was $3,145 Mil.
Total Current Liabilities was $15,721 Mil.
Long-Term Debt was $4,037 Mil.
Net Income was -747.191011236 + -571.269487751 + 1949.89106754 + 170.594837262 = $802 Mil.
Non Operating Income was 1.12359550562 + 2.2271714922 + 19.6078431373 + -2.24466891134 = $21 Mil.
Cash Flow from Operations was -692.134831461 + -1762.80623608 + 501.089324619 + 564.534231201 = $-1,389 Mil.
|Accounts Receivable was $4,043 Mil.
Revenue was 3276.09427609 + 3176.40692641 + 4326.75709001 + 3979.3814433 = $14,759 Mil.
Gross Profit was 1507.29517396 + 1281.38528139 + 1766.95437731 + 1676.54639175 = $6,232 Mil.
Total Current Assets was $14,429 Mil.
Total Assets was $23,224 Mil.
Property, Plant and Equipment(Net PPE) was $882 Mil.
Depreciation, Depletion and Amortization(DDA) was $93 Mil.
Selling, General & Admin. Expense(SGA) was $1,900 Mil.
Total Current Liabilities was $7,514 Mil.
Long-Term Debt was $3,013 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(7440.4494382 / 19735.4216821)||/||(4042.64870932 / 14758.6397358)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(6232.18122441 / 14758.6397358)||/||(7309.05830336 / 19735.4216821)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (25280.8988764 + 2206.74157303) / 51416.8539326)||/||(1 - (14428.7317621 + 882.154882155) / 23224.4668911)|
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.
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))|
|=||(93.1537598204 / (93.1537598204 + 882.154882155))||/||(913.913565727 / (913.913565727 + 2206.74157303))|
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)|
|=||(3145.27061108 / 19735.4216821)||/||(1900.17406213 / 14758.6397358)|
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)|
|=||((4037.07865169 + 15721.3483146) / 51416.8539326)||/||((3013.46801347 + 7514.0291807) / 23224.4668911)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(802.025405813 - 20.7139412237||-||-1389.31751172)||/||51416.8539326|
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.
Nokia Oyj has a M-score of -1.48 signals that the company is likely to be a manipulator.
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
Nokia Oyj Annual Data
Nokia Oyj Quarterly Data