Switch to:
Norfolk Southern Corp (NYSE:NSC)
Beneish M-Score
-2.54 (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.

Norfolk Southern Corp has a M-score of -2.54 suggests that the company is not a manipulator.

NSC' s 10-Year Beneish M-Score Range
Min: -4.29   Max: 1.94
Current: -2.54

-4.29
1.94

During the past 13 years, the highest Beneish M-Score of Norfolk Southern Corp was 1.94. The lowest was -4.29. And the median was -2.60.


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 Norfolk Southern Corp 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 * 0.9671+0.528 * 0.9853+0.404 * 1.139+0.892 * 1.0531+0.115 * 0.9995
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9448+4.679 * -0.0326-0.327 * 0.9594
=-2.54

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $1,103 Mil.
Revenue was 3023 + 3042 + 2689 + 2881 = $11,635 Mil.
Gross Profit was 1962 + 1972 + 1644 + 1875 = $7,453 Mil.
Total Current Assets was $3,012 Mil.
Total Assets was $33,206 Mil.
Property, Plant and Equipment(Net PPE) was $27,230 Mil.
Depreciation, Depletion and Amortization(DDA) was $950 Mil.
Selling, General & Admin. Expense(SGA) was $4,585 Mil.
Total Current Liabilities was $2,082 Mil.
Long-Term Debt was $8,919 Mil.
Net Income was 559 + 562 + 368 + 513 = $2,002 Mil.
Non Operating Income was 32 + 18 + -26 + 39 = $63 Mil.
Cash Flow from Operations was 909 + 849 + 588 + 674 = $3,020 Mil.
Accounts Receivable was $1,083 Mil.
Revenue was 2824 + 2802 + 2738 + 2684 = $11,048 Mil.
Gross Profit was 1814 + 1788 + 1698 + 1673 = $6,973 Mil.
Total Current Assets was $2,494 Mil.
Total Assets was $31,365 Mil.
Property, Plant and Equipment(Net PPE) was $26,413 Mil.
Depreciation, Depletion and Amortization(DDA) was $921 Mil.
Selling, General & Admin. Expense(SGA) was $4,608 Mil.
Total Current Liabilities was $2,332 Mil.
Long-Term Debt was $8,499 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)
=(1103 / 11635) / (1083 / 11048)
=0.09480017 / 0.09802679
=0.9671

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)
=(1972 / 11048) / (1962 / 11635)
=0.63115496 / 0.64056725
=0.9853

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 - (3012 + 27230) / 33206) / (1 - (2494 + 26413) / 31365)
=0.08926098 / 0.07836761
=1.139

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
=11635 / 11048
=1.0531

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))
=(921 / (921 + 26413)) / (950 / (950 + 27230))
=0.0336943 / 0.03371185
=0.9995

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)
=(4585 / 11635) / (4608 / 11048)
=0.39406962 / 0.41708907
=0.9448

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)
=((8919 + 2082) / 33206) / ((8499 + 2332) / 31365)
=0.33129555 / 0.34532122
=0.9594

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
=(2002 - 63 - 3020) / 33206
=-0.0326

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.

Norfolk Southern Corp has a M-score of -2.54 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.

Norfolk Southern Corp Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.97621.04090.96580.81711.17790.88231.07871.09810.9065
GMI 0.97020.98331.09021.01680.94471.0011.03310.99510.9937
AQI 0.25411.04911.0160.70651.16180.97720.91730.95921.0917
SGI 1.13051.16621.10321.13030.74751.19411.1740.98821.0186
DEPI 1.48890.7881.06520.99430.98231.04781.00110.99161.0341
SGAI 0.87270.961600.93051.19680.94450.93541.5530.9962
LVGI 0.8770.90150.95451.03680.98170.99131.03861.08770.9958
TATA -0.0334-0.0347-0.0336-0.0422-0.0348-0.0486-0.0515-0.0476-0.0431
M-score -2.74-2.43-2.33-2.84-2.70-2.63-2.51-2.77-2.71

Norfolk Southern Corp Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.99791.01141.09811.13171.02621.01420.90650.940.99910.9671
GMI 0.98570.99490.99511.00871.02431.00610.99370.99340.98140.9853
AQI 0.91570.90070.95920.98710.99050.98211.09171.08981.08571.139
SGI 1.09821.03590.98820.9690.96190.99061.01861.01881.04751.0531
DEPI 0.99160.98910.99160.99971.01631.03311.03411.02491.00750.9995
SGAI 0.95441.12261.28661.43621.59771.37991.20251.08090.95520.9448
LVGI 1.09491.11571.08771.00111.00261.00510.99581.01611.0110.9594
TATA -0.0473-0.0421-0.0476-0.0304-0.0373-0.0364-0.0348-0.0363-0.0347-0.0326
M-score -2.68-2.74-2.72-2.60-2.76-2.71-2.71-2.67-2.57-2.54
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK