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Newell Brands Inc (NYSE:NWL)
Beneish M-Score
-2.50 (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 Brands Inc has a M-score of -2.50 suggests that the company is not a manipulator.

NWL' s Beneish M-Score Range Over the Past 10 Years
Min: -3.42   Max: -1.79
Current: -2.5

-3.42
-1.79

During the past 13 years, the highest Beneish M-Score of Newell Brands Inc was -1.79. The lowest was -3.42. And the median was -2.61.


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 Brands 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 * 0.97+0.528 * 0.9876+0.404 * 1.0167+0.892 * 1.0329+0.115 * 0.9804
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0183+4.679 * 0.0006-0.327 * 1.0615
=-2.50

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $1,251 Mil.
Revenue was 1560.8 + 1530 + 1560.9 + 1264 = $5,916 Mil.
Gross Profit was 597.2 + 598.9 + 621 + 487.5 = $2,305 Mil.
Total Current Assets was $2,494 Mil.
Total Assets was $7,278 Mil.
Property, Plant and Equipment(Net PPE) was $599 Mil.
Depreciation, Depletion and Amortization(DDA) was $172 Mil.
Selling, General & Admin. Expense(SGA) was $1,626 Mil.
Total Current Liabilities was $1,989 Mil.
Long-Term Debt was $2,688 Mil.
Net Income was 13.2 + 134.2 + 148.5 + 54.1 = $350 Mil.
Non Operating Income was -169.6 + -9.3 + -41.2 + -0.1 = $-220 Mil.
Cash Flow from Operations was 277.7 + 339.9 + 102.5 + -154.3 = $566 Mil.
Accounts Receivable was $1,248 Mil.
Revenue was 1526 + 1484.5 + 1502.2 + 1214.3 = $5,727 Mil.
Gross Profit was 574.1 + 576.7 + 595.6 + 457 = $2,203 Mil.
Total Current Assets was $2,292 Mil.
Total Assets was $6,564 Mil.
Property, Plant and Equipment(Net PPE) was $559 Mil.
Depreciation, Depletion and Amortization(DDA) was $156 Mil.
Selling, General & Admin. Expense(SGA) was $1,546 Mil.
Total Current Liabilities was $1,889 Mil.
Long-Term Debt was $2,085 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)
=(1250.7 / 5915.7) / (1248.2 / 5727)
=0.21142046 / 0.21795006
=0.97

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)
=(598.9 / 5727) / (597.2 / 5915.7)
=0.38473896 / 0.38957351
=0.9876

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 - (2493.5 + 599.2) / 7278) / (1 - (2292.2 + 559.1) / 6564.3)
=0.57506183 / 0.56563533
=1.0167

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
=5915.7 / 5727
=1.0329

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))
=(156.1 / (156.1 + 559.1)) / (171.6 / (171.6 + 599.2))
=0.21826063 / 0.22262584
=0.9804

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)
=(1626 / 5915.7) / (1545.9 / 5727)
=0.27486181 / 0.2699319
=1.0183

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)
=((2687.6 + 1988.6) / 7278) / ((2084.5 + 1888.6) / 6564.3)
=0.64251168 / 0.60525875
=1.0615

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
=(350 - -220.2 - 565.8) / 7278
=0.0006

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 Brands Inc has a M-score of -2.50 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 Brands Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.02831.01370.82291.07011.08090.98611.1031.03011.12270.97
GMI 0.89480.94761.07360.8930.97491.00240.99570.98690.99460.9876
AQI 1.01081.02261.10911.02811.02490.96120.96990.98091.05821.0167
SGI 0.97771.03331.00990.8621.03261.01831.00650.96441.00611.0329
DEPI 0.97391.00540.90810.96860.94661.08351.00230.99411.04230.9804
SGAI 1.08861.02811.03991.06121.0311.01690.99730.98581.06261.0183
LVGI 0.93490.9181.13850.91710.99090.96730.93511.02161.12481.0615
TATA -0.0394-0.0271-0.0657-0.0484-0.0123-0.0678-0.0333-0.0185-0.0265-0.0044
M-score -2.71-2.56-2.92-2.80-2.45-2.79-2.53-2.59-2.51-2.52

Newell Brands Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 0.93380.96910.93220.99461.07491.11371.0531.02610.97430.97
GMI 1.0280.99820.99621.00040.98780.98980.98180.98180.98760.9876
AQI 0.99030.98091.0121.01311.02911.05821.01941.00950.97981.0167
SGI 1.05351.02511.02211.0181.01961.01421.02781.03321.03791.0329
DEPI 0.97010.99411.02181.05161.03861.04231.01640.98771.01710.9804
SGAI 0.94730.98770.99791.00581.0461.07261.07411.07941.04941.0183
LVGI 0.91691.02160.98651.00041.12271.12481.16651.14951.0981.0615
TATA -0.0323-0.0185-0.0196-0.0139-0.0203-0.022-0.0183-0.0166-0.01510.0006
M-score -2.60-2.59-2.60-2.52-2.53-2.50-2.56-2.57-2.59-2.50
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