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Newell Rubbermaid Inc (NYSE:NWL)
Beneish M-Score
-2.58 (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.

Newell Rubbermaid Inc has a M-score of -2.58 suggests that the company is not a manipulator.

NWL' s 10-Year Beneish M-Score Range
Min: -3.42   Max: -1.27
Current: -2.58

-3.42
-1.27

During the past 13 years, the highest Beneish M-Score of Newell Rubbermaid Inc was -1.27. The lowest was -3.42. And the median was -2.67.


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 Newell Rubbermaid Inc 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 * 0.9337+0.528 * 0.9959+0.404 * 1.012+0.892 * 1.0204+0.115 * 1.0218
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.997+4.679 * -0.0138-0.327 * 0.9865
=-2.58

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $973 Mil.
Revenue was 1232.2 + 1489.8 + 1487.2 + 1474.7 = $5,684 Mil.
Gross Profit was 469.3 + 557 + 564.9 + 582.7 = $2,174 Mil.
Total Current Assets was $2,231 Mil.
Total Assets was $5,994 Mil.
Property, Plant and Equipment(Net PPE) was $541 Mil.
Depreciation, Depletion and Amortization(DDA) was $157 Mil.
Selling, General & Admin. Expense(SGA) was $1,457 Mil.
Total Current Liabilities was $1,553 Mil.
Long-Term Debt was $1,667 Mil.
Net Income was 52.9 + 117.3 + 193.3 + 109.8 = $473 Mil.
Non Operating Income was -40 + -36.4 + 0.7 + -4.2 = $-80 Mil.
Cash Flow from Operations was -92.1 + 304.2 + 360.8 + 63.3 = $636 Mil.
Accounts Receivable was $1,021 Mil.
Revenue was 1240.8 + 1447.2 + 1456.9 + 1425.3 = $5,570 Mil.
Gross Profit was 473.6 + 536.4 + 559 + 552.7 = $2,122 Mil.
Total Current Assets was $2,357 Mil.
Total Assets was $6,197 Mil.
Property, Plant and Equipment(Net PPE) was $550 Mil.
Depreciation, Depletion and Amortization(DDA) was $164 Mil.
Selling, General & Admin. Expense(SGA) was $1,432 Mil.
Total Current Liabilities was $1,675 Mil.
Long-Term Debt was $1,700 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)
=(973.1 / 5683.9) / (1021.3 / 5570.2)
=0.17120287 / 0.18335069
=0.9337

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)
=(557 / 5570.2) / (469.3 / 5683.9)
=0.38090194 / 0.38246626
=0.9959

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 - (2231.3 + 541.3) / 5993.9) / (1 - (2356.6 + 549.5) / 6197.2)
=0.53742972 / 0.53106242
=1.012

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
=5683.9 / 5570.2
=1.0204

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))
=(164.1 / (164.1 + 549.5)) / (157.2 / (157.2 + 541.3))
=0.22996076 / 0.22505369
=1.0218

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)
=(1456.8 / 5683.9) / (1431.9 / 5570.2)
=0.25630289 / 0.25706438
=0.997

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)
=((1666.7 + 1552.8) / 5993.9) / ((1699.6 + 1674.6) / 6197.2)
=0.53712941 / 0.5444717
=0.9865

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
=(473.3 - -79.9 - 636.2) / 5993.9
=-0.0138

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.

Newell Rubbermaid Inc has a M-score of -2.58 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.

Newell Rubbermaid Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.9950.92190.92691.01370.82291.07011.10020.96881.16680.9738
GMI 0.98030.94390.92120.94761.07360.8930.96761.00990.98221.0005
AQI 0.94661.33181.01081.02261.10911.02811.02490.96120.96990.9809
SGI 0.86281.00181.08461.03331.00990.8621.01451.03650.95151.0202
DEPI 0.85930.79290.89131.00540.90810.96860.94661.08351.00230.9941
SGAI 1.04861.06251.11111.02811.03991.06121.03821.00981.0010.9822
LVGI 0.98561.01770.93490.9181.13850.91710.99090.96730.93511.0216
TATA -0.0776-0.0645-0.04-0.0275-0.1124-0.0484-0.0123-0.0678-0.0334-0.0185
M-score -3.02-2.79-2.71-2.56-3.14-2.80-2.45-2.79-2.53-2.58

Newell Rubbermaid Inc Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 0.97760.94690.97091.12511.16681.13661.11890.980.97380.9337
GMI 1.00611.01240.99610.98190.98220.99260.99371.00331.00050.9959
AQI 0.96120.95460.92650.97730.96990.97220.99550.99030.98091.012
SGI 1.02711.02880.9990.96850.95150.95370.98231.00391.02021.0204
DEPI 1.08351.07981.03891.02051.00230.96560.96690.97010.99411.0218
SGAI 1.01320.99520.99321.00111.0010.98980.97530.96640.98220.997
LVGI 0.96730.98041.01710.95590.93510.96960.94570.91691.02160.9865
TATA -0.0678-0.0766-0.0804-0.0411-0.0333-0.0231-0.0159-0.0116-0.0128-0.0138
M-score -2.79-2.86-2.92-2.59-2.53-2.51-2.45-2.52-2.56-2.58
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