Switch to:
Northern Trust Corp (NAS:NTRS)
Beneish M-Score
-2.62 (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 -2.62 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: -2.62

-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 * 0.7974+0.528 * 1+0.404 * 1.0004+0.892 * 1.0752+0.115 * 0.9737
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9673+4.679 * -0.0005-0.327 * 1.0794
=-2.62

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $1,903 Mil.
Revenue was 1190 + 1156.7 + 1155.5 + 1255.9 = $4,758 Mil.
Gross Profit was 1190 + 1156.7 + 1155.5 + 1255.9 = $4,758 Mil.
Total Current Assets was $0 Mil.
Total Assets was $117,799 Mil.
Property, Plant and Equipment(Net PPE) was $438 Mil.
Depreciation, Depletion and Amortization(DDA) was $354 Mil.
Selling, General & Admin. Expense(SGA) was $2,562 Mil.
Total Current Liabilities was $0 Mil.
Long-Term Debt was $7,189 Mil.
Net Income was 241.8 + 239.3 + 234.6 + 269.2 = $985 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was -299.1 + 1350.6 + -1043.4 + 1036.4 = $1,045 Mil.
Accounts Receivable was $2,219 Mil.
Revenue was 1134.5 + 1130.1 + 1078.9 + 1081.7 = $4,425 Mil.
Gross Profit was 1134.5 + 1130.1 + 1078.9 + 1081.7 = $4,425 Mil.
Total Current Assets was $0 Mil.
Total Assets was $106,952 Mil.
Property, Plant and Equipment(Net PPE) was $442 Mil.
Depreciation, Depletion and Amortization(DDA) was $341 Mil.
Selling, General & Admin. Expense(SGA) was $2,463 Mil.
Total Current Liabilities was $0 Mil.
Long-Term Debt was $6,048 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)
=(1902.7 / 4758.1) / (2219.3 / 4425.2)
=0.39988651 / 0.50151406
=0.7974

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)
=(4425.2 / 4425.2) / (4758.1 / 4758.1)
=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 + 437.8) / 117798.8) / (1 - (0 + 442.4) / 106952)
=0.99628349 / 0.99586356
=1.0004

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
=4758.1 / 4425.2
=1.0752

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))
=(340.6 / (340.6 + 442.4)) / (353.5 / (353.5 + 437.8))
=0.43499361 / 0.44673322
=0.9737

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)
=(2562 / 4758.1) / (2463.4 / 4425.2)
=0.53845022 / 0.5566754
=0.9673

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)
=((7189.4 + 0) / 117798.8) / ((6047.5 + 0) / 106952)
=0.06103118 / 0.05654406
=1.0794

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
=(984.9 - 0 - 1044.5) / 117798.8
=-0.0005

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 -2.62 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 0.93781.4171.03311.2660.9161.07382.54750.65691.04851.2663
GMI 1111111111
AQI 1.00081.00081.00110.99961.00061.00111.00011.00031.00041.0002
SGI 1.14131.17121.21930.88510.96321.03351.03351.00691.10411.0857
DEPI 2.07390.8770.29420.91460.93560.94810.90960.93630.95210.9774
SGAI 0.9351.05350.87741.04961.04111.09690.96770.98081.10351.2459
LVGI 0.44321.07081.05431.00841.02920.93320.46492.12190.85741.3364
TATA 0.0046-0.0023-0.0007-0.0018-0.0014-0.0065-0.0013-0.0011-0.0011-0.0074
M-score -2.07-2.00-2.33-2.37-2.62-2.41-0.86-3.17-2.32-2.35

Northern Trust Corp Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 0.63012.12591.00390.89211.0931.12891.16761.13231.26630.7974
GMI 1111111111
AQI 1.00031.00061.00051.00071.00041.00021.00051.00041.00021.0004
SGI 1.04961.0631.06991.05791.05921.06541.09131.10121.08571.0752
DEPI 0.93630.93160.92880.95480.95210.9660.96910.96340.97740.9737
SGAI 1.26751.26971.38611.48890.93731.0020.90110.8451.02720.9673
LVGI 2.12191.07770.5871.3560.85741.26051.59141.30881.33641.0794
TATA -0.001-0.003-0.0276-0.0037-0.0011-0.00030.00020.0069-0.0074-0.0005
M-score -3.20-1.48-2.48-2.75-2.29-2.39-2.42-2.31-2.31-2.62
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