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Newell Rubbermaid Inc (NYSE:NWL)
Beneish M-Score
-2.52 (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 -2.52 suggests that the company is not a manipulator.

NWL' s 10-Year Beneish M-Score Range
Min: -3.42   Max: -1.79
Current: -2.52

-3.42
-1.79

During the past 13 years, the highest Beneish M-Score of Newell Rubbermaid Inc was -1.79. The lowest was -3.42. And the median was -2.63.


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 * 1.1066+0.528 * 0.985+0.404 * 1.0347+0.892 * 1.0207+0.115 * 1.0423
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0827+4.679 * -0.0261-0.327 * 1.1057
=-2.52

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $1,248 Mil.
Revenue was 1526 + 1484.5 + 1521 + 1232.2 = $5,764 Mil.
Gross Profit was 574.1 + 576.7 + 608.4 + 469.3 = $2,229 Mil.
Total Current Assets was $2,427 Mil.
Total Assets was $6,681 Mil.
Property, Plant and Equipment(Net PPE) was $559 Mil.
Depreciation, Depletion and Amortization(DDA) was $156 Mil.
Selling, General & Admin. Expense(SGA) was $1,570 Mil.
Total Current Liabilities was $1,891 Mil.
Long-Term Debt was $2,085 Mil.
Net Income was 52 + 122.3 + 150.6 + 52.9 = $378 Mil.
Non Operating Income was -37.1 + -7.7 + 2.6 + -40 = $-82 Mil.
Cash Flow from Operations was 290.8 + 339.2 + 96.2 + -92.1 = $634 Mil.
Accounts Receivable was $1,105 Mil.
Revenue was 1465.3 + 1466.1 + 1474.7 + 1240.8 = $5,647 Mil.
Gross Profit was 541.7 + 552.5 + 582.7 + 473.6 = $2,151 Mil.
Total Current Assets was $2,286 Mil.
Total Assets was $6,070 Mil.
Property, Plant and Equipment(Net PPE) was $540 Mil.
Depreciation, Depletion and Amortization(DDA) was $159 Mil.
Selling, General & Admin. Expense(SGA) was $1,421 Mil.
Total Current Liabilities was $1,605 Mil.
Long-Term Debt was $1,662 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)
=(1248.2 / 5763.7) / (1105.1 / 5646.9)
=0.21656228 / 0.1957003
=1.1066

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)
=(576.7 / 5646.9) / (574.1 / 5763.7)
=0.38082842 / 0.386644
=0.985

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 - (2426.6 + 559.1) / 6681.1) / (1 - (2285.6 + 539.6) / 6069.7)
=0.55311251 / 0.53454042
=1.0347

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
=5763.7 / 5646.9
=1.0207

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))
=(158.9 / (158.9 + 539.6)) / (156.1 / (156.1 + 559.1))
=0.22748747 / 0.21826063
=1.0423

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)
=(1570.4 / 5763.7) / (1421.1 / 5646.9)
=0.27246387 / 0.2516602
=1.0827

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)
=((2084.5 + 1890.7) / 6681.1) / ((1661.6 + 1604.5) / 6069.7)
=0.59499184 / 0.53809908
=1.1057

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
=(377.8 - -82.2 - 634.1) / 6681.1
=-0.0261

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 -2.52 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.92190.92691.01370.82291.07011.10020.96881.16680.98861.1058
GMI 0.94390.92120.94761.07360.8930.96761.00990.98221.01020.985
AQI 1.33181.01081.02261.10911.02811.02490.96120.96990.98091.0347
SGI 1.00181.08461.03331.00990.8621.01451.03650.95151.00491.0214
DEPI 0.79290.89131.00540.90810.96860.94661.08351.00230.99411.0423
SGAI 1.06251.11111.02811.03991.06121.03821.00981.0010.9651.0815
LVGI 1.01770.93490.9181.13850.91710.99090.96730.93511.02161.1057
TATA -0.0645-0.04-0.0275-0.1124-0.0484-0.0123-0.0678-0.0334-0.0185-0.0261
M-score -2.79-2.71-2.56-3.14-2.80-2.45-2.79-2.53-2.58-2.52

Newell Rubbermaid Inc Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 1.12511.16681.13661.11890.98360.98170.94131.00081.08171.1066
GMI 0.98190.98220.99260.99371.00531.00521.00071.00220.98970.985
AQI 0.97730.96990.97220.99550.99030.98091.0121.01311.02911.0347
SGI 0.96850.95150.95370.98231.00021.0121.01221.01161.01321.0207
DEPI 1.02051.00230.96560.96690.97010.99411.02181.05161.03861.0423
SGAI 1.00111.0010.98980.97530.96170.9730.98791.00111.04011.0827
LVGI 0.95590.93510.96960.94570.91691.02160.98651.00041.12271.1057
TATA -0.0411-0.0333-0.0231-0.0159-0.0113-0.0185-0.0196-0.0187-0.025-0.0261
M-score -2.59-2.53-2.51-2.45-2.52-2.58-2.60-2.54-2.55-2.52
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