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Newell Rubbermaid Inc (NYSE:NWL)
Beneish M-Score
-2.56 (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 -2.56 suggests that the company is not a manipulator.

NWL' s 10-Year Beneish M-Score Range
Min: -3.42   Max: -1.79
Current: -2.56

-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 -2.65.


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 * 0.9738+0.528 * 1.0005+0.404 * 0.9809+0.892 * 1.0202+0.115 * 0.9941
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9822+4.679 * -0.0128-0.327 * 1.0216
=-2.56

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $1,105 Mil.
Revenue was 1489.8 + 1487.2 + 1474.7 + 1240.8 = $5,693 Mil.
Gross Profit was 557 + 564.9 + 582.7 + 473.6 = $2,178 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 $1,446 Mil.
Total Current Liabilities was $1,605 Mil.
Long-Term Debt was $1,662 Mil.
Net Income was 117.3 + 193.3 + 109.8 + 54.2 = $475 Mil.
Non Operating Income was -36.4 + 0.7 + -4.2 + -13 = $-53 Mil.
Cash Flow from Operations was 304.2 + 360.8 + 63.3 + -123.1 = $605 Mil.
Accounts Receivable was $1,112 Mil.
Revenue was 1447.2 + 1456.9 + 1425.3 + 1250.5 = $5,580 Mil.
Gross Profit was 536.4 + 559 + 552.7 + 488 = $2,136 Mil.
Total Current Assets was $2,271 Mil.
Total Assets was $6,222 Mil.
Property, Plant and Equipment(Net PPE) was $560 Mil.
Depreciation, Depletion and Amortization(DDA) was $164 Mil.
Selling, General & Admin. Expense(SGA) was $1,443 Mil.
Total Current Liabilities was $1,571 Mil.
Long-Term Debt was $1,707 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)
=(1105.1 / 5692.5) / (1112.4 / 5579.9)
=0.19413263 / 0.19935841
=0.9738

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)
=(564.9 / 5579.9) / (557 / 5692.5)
=0.38282048 / 0.38264383
=1.0005

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 - (2285.6 + 539.6) / 6069.7) / (1 - (2271.1 + 560.2) / 6222)
=0.53454042 / 0.54495339
=0.9809

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
=5692.5 / 5579.9
=1.0202

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))
=(163.7 / (163.7 + 560.2)) / (158.9 / (158.9 + 539.6))
=0.22613621 / 0.22748747
=0.9941

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)
=(1446.1 / 5692.5) / (1443.2 / 5579.9)
=0.25403601 / 0.25864263
=0.9822

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)
=((1661.6 + 1604.5) / 6069.7) / ((1706.5 + 1570.8) / 6222)
=0.53809908 / 0.52672774
=1.0216

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
=(474.6 - -52.9 - 605.2) / 6069.7
=-0.0128

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 -2.56 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

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 0.96040.97760.94690.97091.12511.16681.13661.11890.980.9738
GMI 1.00381.00611.01240.99610.98190.98220.99260.99371.00331.0005
AQI 0.96490.96120.95460.92650.97730.96990.97220.99550.99030.9809
SGI 1.02151.02711.02880.9990.96850.95150.95370.98231.00391.0202
DEPI 1.06351.08351.07981.03891.02051.00230.96560.96690.97010.9941
SGAI 1.02831.01320.99520.99321.00111.0010.98980.97530.96640.9822
LVGI 0.95310.96730.98041.01710.95590.93510.96960.94570.91691.0216
TATA -0.0557-0.0678-0.0766-0.0804-0.0411-0.0333-0.0231-0.0159-0.0116-0.0128
M-score -2.75-2.79-2.86-2.92-2.59-2.53-2.51-2.45-2.52-2.56
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