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Nokia Oyj (NYSE:NOK)
Beneish M-Score
-0.08 (As of Today)

Warning Sign:

Beneish M-Score -0.08 higher than -2.22, which implies that it might have manipulated its financial results.

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.

Nokia Oyj has a M-score of -0.09 signals that the company is a manipulator.

NOK' s 10-Year Beneish M-Score Range
Min: -4.51   Max: 316312.65
Current: -0.08

-4.51
316312.65

During the past 13 years, the highest Beneish M-Score of Nokia Oyj was 316312.65. The lowest was -4.51. And the median was -2.59.


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 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 * 3.4694+0.528 * 0.5111+0.404 * 2.1462+0.892 * 0.3398+0.115 * 1.4293
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9833+4.679 * 0.0761-0.327 * 0.7206
=-0.09

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $4,387 Mil.
Revenue was 3981.05548038 + 3679.55801105 + -6130.79019074 + 7724.420191 = $9,254 Mil.
Gross Profit was 1751.01488498 + 1679.55801105 + -267.029972752 + 2448.84038199 = $5,612 Mil.
Total Current Assets was $19,742 Mil.
Total Assets was $28,031 Mil.
Property, Plant and Equipment(Net PPE) was $769 Mil.
Depreciation, Depletion and Amortization(DDA) was $901 Mil.
Selling, General & Admin. Expense(SGA) was $1,163 Mil.
Total Current Liabilities was $11,143 Mil.
Long-Term Debt was $3,294 Mil.
Net Income was 3396.48173207 + -330.110497238 + -34.0599455041 + -124.1473397 = $2,908 Mil.
Non Operating Income was -6.76589986468 + -102.209944751 + -81.7438692098 + 4.09276944065 = $-187 Mil.
Cash Flow from Operations was 1069.01217862 + -190.607734807 + 72.2070844687 + 12.278308322 = $963 Mil.
Accounts Receivable was $3,721 Mil.
Revenue was 3609.94764398 + 3542.37288136 + 10692.8191489 + 9389.10505837 = $27,234 Mil.
Gross Profit was 1251.30890052 + 1172.09908735 + 3436.17021277 + 2582.36057069 = $8,442 Mil.
Total Current Assets was $9,433 Mil.
Total Assets was $11,465 Mil.
Property, Plant and Equipment(Net PPE) was $598 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,015 Mil.
Selling, General & Admin. Expense(SGA) was $3,481 Mil.
Total Current Liabilities was $6,950 Mil.
Long-Term Debt was $1,243 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)
=(4387.00947226 / 9254.24349169) / (3721.20418848 / 27234.2447326)
=0.47405382 / 0.13663695
=3.4694

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)
=(1679.55801105 / 27234.2447326) / (1751.01488498 / 9254.24349169)
=0.30997514 / 0.60646592
=0.5111

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 - (19741.5426252 + 768.606224628) / 28031.1231394) / (1 - (9433.2460733 + 598.167539267) / 11464.6596859)
=0.26830799 / 0.12501427
=2.1462

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
=9254.24349169 / 27234.2447326
=0.3398

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))
=(2015.27060898 / (2015.27060898 + 598.167539267)) / (900.544959128 / (900.544959128 + 768.606224628))
=0.77111854 / 0.5395227
=1.4293

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)
=(1163.03838357 / 9254.24349169) / (3480.8493347 / 27234.2447326)
=0.12567622 / 0.12781149
=0.9833

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)
=((3293.64005413 + 11143.4370771) / 28031.1231394) / ((1243.45549738 + 6950.2617801) / 11464.6596859)
=0.51503741 / 0.71469346
=0.7206

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
=(2908.16394963 - -186.626944385 - 962.889836604) / 28031.1231394
=0.0761

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 -0.09 signals that the company is likely to 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.

Nokia Oyj Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.84321.04430.91581.55330.84631.03640.91891.0440.98911.4431
GMI 1.09041.08551.07710.960.98931.05861.07181.03131.05310.6611
AQI 0.75571.10131.35941.58311.93490.87240.89760.95741.03411.6851
SGI 1.03251.08031.2881.41030.89390.86840.97060.87910.80440.4315
DEPI 1.16461.16571.00730.79580.88670.89271.01231.04480.96060.8549
SGAI 0.89031.02710.9271.1251.02581.10920.94921.08041.0860.9528
LVGI 1.0181.23331.04071.12781.05081.02431.01411.06231.1140.7673
TATA -0.0546-0.0284-0.0085-0.06790.0437-0.0668-0.0748-0.0629-0.0919-0.0249
M-score -2.87-2.48-2.15-1.80-2.17-2.94-2.93-2.87-3.11-2.53

Nokia Oyj Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 1.20390.96611.05721.09130.84530.82021.17022.77833.31873.4694
GMI 1.03951.0821.08341.05061.01310.88030.83530.52960.49540.5111
AQI 1.01520.94110.98491.03410.47740.47751.03481.68511.89862.1462
SGI 0.67630.7430.71690.72910.68280.61630.620.22410.27010.3398
DEPI 1.01060.93280.96790.96060.61880.64010.88260.80281.32421.4293
SGAI 1.17361.18381.14541.0850.96950.92160.92820.90870.93990.9833
LVGI 1.13351.12031.14481.1141.19161.10611.08790.76730.94520.7206
TATA -0.0953-0.1497-0.1345-0.0875-0.2694-0.1679-0.0383-0.0263-0.01450.0761
M-score -3.07-3.50-3.35-3.06-4.47-4.11-2.94-1.56-0.90-0.09
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