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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 1.35. The lowest was -3.51. And the median was -2.35.
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 * 1.1775||+||0.528 * 1.1695||+||0.404 * 1.3632||+||0.892 * 1.6169||+||0.115 * 0.4926|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.2128||+||4.679 * 0.0443||-||0.327 * 0.8639|
* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.
|This Year (Sep16) TTM:||Last Year (Sep15) TTM:|
|Accounts Receivable was $7,222 Mil.|
Revenue was 6610.54994388 + 6273.03370787 + 6123.60801782 + 3931.37254902 = $22,939 Mil.
Gross Profit was 2487.09315376 + 2278.65168539 + 1730.51224944 + 1844.22657952 = $8,340 Mil.
Total Current Assets was $22,897 Mil.
Total Assets was $48,719 Mil.
Property, Plant and Equipment(Net PPE) was $2,154 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,416 Mil.
Selling, General & Admin. Expense(SGA) was $3,740 Mil.
Total Current Liabilities was $14,054 Mil.
Long-Term Debt was $3,948 Mil.
Net Income was -140.291806958 + -747.191011236 + -571.269487751 + 1949.89106754 = $491 Mil.
Non Operating Income was 3.367003367 + 1.12359550562 + 2.2271714922 + 19.6078431373 = $26 Mil.
Cash Flow from Operations was 262.626262626 + -692.134831461 + -1762.80623608 + 501.089324619 = $-1,691 Mil.
|Accounts Receivable was $3,793 Mil.
Revenue was 3407.40740741 + 3276.09427609 + 3176.40692641 + 4326.75709001 = $14,187 Mil.
Gross Profit was 1476.99214366 + 1507.29517396 + 1281.38528139 + 1766.95437731 = $6,033 Mil.
Total Current Assets was $14,082 Mil.
Total Assets was $23,043 Mil.
Property, Plant and Equipment(Net PPE) was $749 Mil.
Depreciation, Depletion and Amortization(DDA) was $182 Mil.
Selling, General & Admin. Expense(SGA) was $1,907 Mil.
Total Current Liabilities was $6,824 Mil.
Long-Term Debt was $3,033 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)|
|=||(7222.22222222 / 22938.5642186)||/||(3793.49046016 / 14186.6656999)|
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)|
|=||(6032.62697632 / 14186.6656999)||/||(8340.48366812 / 22938.5642186)|
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 - (22896.7452301 + 2153.75982043) / 48719.4163861)||/||(1 - (14081.9304153 + 748.59708193) / 23042.6487093)|
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))|
|=||(181.818181818 / (181.818181818 + 748.59708193))||/||(1416.45532317 / (1416.45532317 + 2153.75982043))|
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)|
|=||(3740.10787259 / 22938.5642186)||/||(1907.30435706 / 14186.6656999)|
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)|
|=||((3948.37261504 + 14053.8720539) / 48719.4163861)||/||((3032.54769921 + 6823.79349046) / 23042.6487093)|
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|
|=||(491.138761593 - 26.3256135021||-||-1691.2254803)||/||48719.4163861|
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 -1.37 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