Switch to:
Northern Trust Corp (NAS:NTRS)
Beneish M-Score
-2.49 (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.

Northern Trust Corp has a M-score of -2.49 suggests that the company is not a manipulator.

NTRS' s Beneish M-Score Range Over the Past 10 Years
Min: -3.96   Max: 6.37
Current: -2.49

-3.96
6.37

During the past 13 years, the highest Beneish M-Score of Northern Trust Corp was 6.37. The lowest was -3.96. And the median was -2.37.


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 Northern Trust 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 * 1.0402+0.528 * 1+0.404 * 1.0001+0.892 * 1.0477+0.115 * 0.9809
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0089+4.679 * 0.0097-0.327 * 1.4104
=-2.49

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $2,217 Mil.
Revenue was 1316.7 + 1190 + 1156.7 + 1155.5 = $4,819 Mil.
Gross Profit was 1316.7 + 1190 + 1156.7 + 1155.5 = $4,819 Mil.
Total Current Assets was $0 Mil.
Total Assets was $121,510 Mil.
Property, Plant and Equipment(Net PPE) was $434 Mil.
Depreciation, Depletion and Amortization(DDA) was $357 Mil.
Selling, General & Admin. Expense(SGA) was $2,483 Mil.
Total Current Liabilities was $0 Mil.
Long-Term Debt was $9,230 Mil.
Net Income was 260.7 + 241.8 + 239.3 + 234.6 = $976 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was -214 + -299.1 + 1350.6 + -1043.4 = $-206 Mil.
Accounts Receivable was $2,034 Mil.
Revenue was 1255.9 + 1134.5 + 1130.1 + 1078.9 = $4,599 Mil.
Gross Profit was 1255.9 + 1134.5 + 1130.1 + 1078.9 = $4,599 Mil.
Total Current Assets was $0 Mil.
Total Assets was $119,943 Mil.
Property, Plant and Equipment(Net PPE) was $437 Mil.
Depreciation, Depletion and Amortization(DDA) was $346 Mil.
Selling, General & Admin. Expense(SGA) was $2,349 Mil.
Total Current Liabilities was $0 Mil.
Long-Term Debt was $6,460 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)
=(2217 / 4818.9) / (2034.2 / 4599.4)
=0.4600635 / 0.44227508
=1.0402

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)
=(4599.4 / 4599.4) / (4818.9 / 4818.9)
=1 / 1
=1

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 - (0 + 434) / 121509.6) / (1 - (0 + 436.5) / 119942.9)
=0.99642827 / 0.99636077
=1.0001

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
=4818.9 / 4599.4
=1.0477

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))
=(346.3 / (346.3 + 436.5)) / (356.5 / (356.5 + 434))
=0.44238631 / 0.45098039
=0.9809

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)
=(2482.9 / 4818.9) / (2348.9 / 4599.4)
=0.51524207 / 0.51069705
=1.0089

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)
=((9230 + 0) / 121509.6) / ((6459.7 + 0) / 119942.9)
=0.07596108 / 0.05385646
=1.4104

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
=(976.4 - 0 - -205.9) / 121509.6
=0.0097

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.

Northern Trust Corp has a M-score of -2.49 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.

Northern Trust Corp Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.93781.4171.03311.2660.9161.14022.39930.63011.0931.2663
GMI 1111111111
AQI 1.00081.00081.00110.99961.00061.00111.00011.00031.00041.0002
SGI 1.14131.17121.21930.88510.96320.97341.09731.04961.05921.0857
DEPI 0.02320.8770.27480.97930.93560.94810.90960.93630.95210.9774
SGAI 0.9351.05350.8241.11761.04111.12311.04121.29380.99710.9489
LVGI 0.44321.07081.05431.00841.02920.93320.46492.12190.85741.3364
TATA 0.0046-0.0023-0.0007-0.0018-0.0014-0.0068-0.0013-0.001-0.0011-0.0074
M-score -2.31-2.00-2.33-2.37-2.62-2.41-0.95-3.21-2.30-2.30

Northern Trust Corp Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 2.12591.00390.89211.0931.12891.16761.13231.26630.79741.0402
GMI 1111111111
AQI 1.00061.00051.00071.00041.00021.00051.00041.00021.00041.0001
SGI 1.0631.06991.05791.05921.06541.09131.10121.08571.07521.0477
DEPI 0.93160.92880.95480.95210.9660.96910.96340.97740.97370.9809
SGAI 1.26971.38611.48890.93731.0020.86030.80720.9820.92521.0089
LVGI 1.07770.5871.3560.85741.26051.59141.30881.33641.07941.4104
TATA -0.003-0.0276-0.0037-0.0011-0.00030.00020.0069-0.0074-0.00050.0097
M-score -1.48-2.48-2.75-2.29-2.39-2.42-2.31-2.30-2.62-2.49
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)
FEEDBACK