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Beneish M-Score -1 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.
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 -2.48.
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 * 1.7079||+||0.528 * 1.0582||+||0.404 * 1.3388||+||0.892 * 1.1023||+||0.115 * 4.4804|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.2334||+||4.679 * 0.056||-||0.327 * 0.7686|
|This Year (Mar16) TTM:||Last Year (Mar15) TTM:|
|Accounts Receivable was $7,301 Mil.|
Revenue was 6123.60801782 + 3931.37254902 + 3407.40740741 + 3601.57126824 = $17,064 Mil.
Gross Profit was 1730.51224944 + 1844.22657952 + 1455.667789 + 1722.78338945 = $6,753 Mil.
Total Current Assets was $26,470 Mil.
Total Assets was $51,955 Mil.
Property, Plant and Equipment(Net PPE) was $2,241 Mil.
Depreciation, Depletion and Amortization(DDA) was $93 Mil.
Selling, General & Admin. Expense(SGA) was $2,617 Mil.
Total Current Liabilities was $14,147 Mil.
Long-Term Debt was $4,449 Mil.
Net Income was -571.269487751 + 1949.89106754 + 170.594837262 + 389.450056117 = $1,939 Mil.
Non Operating Income was 2.2271714922 + 19.6078431373 + -2.24466891134 + -5.61167227834 = $14 Mil.
Cash Flow from Operations was -1762.80623608 + 501.089324619 + 564.534231201 + -289.562289562 = $-987 Mil.
|Accounts Receivable was $3,878 Mil.
Revenue was 3176.40692641 + 4326.75709001 + 3979.3814433 + 3997.2826087 = $15,480 Mil.
Gross Profit was 1281.38528139 + 1766.95437731 + 1676.54639175 + 1758.15217391 = $6,483 Mil.
Total Current Assets was $15,019 Mil.
Total Assets was $23,826 Mil.
Property, Plant and Equipment(Net PPE) was $844 Mil.
Depreciation, Depletion and Amortization(DDA) was $184 Mil.
Selling, General & Admin. Expense(SGA) was $1,925 Mil.
Total Current Liabilities was $8,116 Mil.
Long-Term Debt was $2,979 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)|
|=||(7300.66815145 / 17063.9592425)||/||(3877.70562771 / 15479.8280684)|
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)|
|=||(1844.22657952 / 15479.8280684)||/||(1730.51224944 / 17063.9592425)|
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 - (26469.9331849 + 2240.53452116) / 51955.4565702)||/||(1 - (15019.4805195 + 844.155844156) / 23825.7575758)|
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))|
|=||(183.853284397 / (183.853284397 + 844.155844156))||/||(93.1537598204 / (93.1537598204 + 2240.53452116))|
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)|
|=||(2616.59559627 / 17063.9592425)||/||(1924.54213903 / 15479.8280684)|
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)|
|=||((4448.77505568 + 14146.9933185) / 51955.4565702)||/||((2979.43722944 + 8115.8008658) / 23825.7575758)|
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|
|=||(1938.66647317 - 13.9786734398||-||-986.744969823)||/||51955.4565702|
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 -0.87 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