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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: -1.27
Current: -2.56

-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 -2.66.


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 * 1.0657+0.528 * 0.9807+0.404 * 1.0291+0.892 * 1.0284+0.115 * 1.0386
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0568+4.679 * -0.025-0.327 * 1.1227
=-2.56

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $1,158 Mil.
Revenue was 1484.5 + 1521 + 1232.2 + 1550.8 = $5,789 Mil.
Gross Profit was 576.7 + 608.4 + 469.3 + 595 = $2,249 Mil.
Total Current Assets was $2,377 Mil.
Total Assets was $6,349 Mil.
Property, Plant and Equipment(Net PPE) was $525 Mil.
Depreciation, Depletion and Amortization(DDA) was $154 Mil.
Selling, General & Admin. Expense(SGA) was $1,538 Mil.
Total Current Liabilities was $2,189 Mil.
Long-Term Debt was $1,419 Mil.
Net Income was 122.3 + 150.6 + 52.9 + 117.3 = $443 Mil.
Non Operating Income was -7.7 + 2.6 + -40 + -0.6 = $-46 Mil.
Cash Flow from Operations was 339.2 + 96.2 + -92.1 + 304.2 = $648 Mil.
Accounts Receivable was $1,057 Mil.
Revenue was 1466.1 + 1474.7 + 1240.8 + 1447.2 = $5,629 Mil.
Gross Profit was 552.5 + 582.7 + 473.6 + 536.4 = $2,145 Mil.
Total Current Assets was $2,384 Mil.
Total Assets was $6,153 Mil.
Property, Plant and Equipment(Net PPE) was $523 Mil.
Depreciation, Depletion and Amortization(DDA) was $161 Mil.
Selling, General & Admin. Expense(SGA) was $1,415 Mil.
Total Current Liabilities was $1,443 Mil.
Long-Term Debt was $1,671 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)
=(1158.3 / 5788.5) / (1056.9 / 5628.8)
=0.20010365 / 0.18776649
=1.0657

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)
=(608.4 / 5628.8) / (576.7 / 5788.5)
=0.38111143 / 0.38859808
=0.9807

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 - (2377.4 + 525.3) / 6349.2) / (1 - (2384.2 + 523.1) / 6152.9)
=0.54282429 / 0.5274911
=1.0291

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
=5788.5 / 5628.8
=1.0284

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))
=(161 / (161 + 523.1)) / (153.9 / (153.9 + 525.3))
=0.23534571 / 0.22659011
=1.0386

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)
=(1537.7 / 5788.5) / (1414.9 / 5628.8)
=0.2656474 / 0.25136796
=1.0568

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)
=((1418.7 + 2188.7) / 6349.2) / ((1671.1 + 1442.8) / 6152.9)
=0.56816607 / 0.50608656
=1.1227

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
=(443.1 - -45.7 - 647.5) / 6349.2
=-0.025

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

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.97091.12511.16681.13661.11890.98360.9670.92720.9861.0657
GMI 0.99610.98190.98220.99260.99371.00530.99580.99120.99290.9807
AQI 0.92650.97730.96990.97220.99550.99030.98091.0121.01311.0291
SGI 0.9990.96850.95150.95370.98231.00021.02731.02761.02681.0284
DEPI 1.03891.02051.00230.96560.96690.97010.99411.02181.05161.0386
SGAI 0.99321.00111.0010.98980.97530.96170.98991.00481.01791.0568
LVGI 1.01710.95590.93510.96960.94570.91691.02160.98651.00041.1227
TATA -0.0804-0.0411-0.0333-0.0231-0.0159-0.0113-0.0185-0.0196-0.0187-0.025
M-score -2.92-2.59-2.53-2.51-2.45-2.52-2.59-2.61-2.55-2.56
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