Switch to:
Procter & Gamble Co (NYSE:PG)
Beneish M-Score
-2.77 (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.

Procter & Gamble Co has a M-score of -2.77 suggests that the company is not a manipulator.

PG' s Beneish M-Score Range Over the Past 10 Years
Min: -3.06   Max: -1.95
Current: -2.77

-3.06
-1.95

During the past 13 years, the highest Beneish M-Score of Procter & Gamble Co was -1.95. The lowest was -3.06. 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 Procter & Gamble Co 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 * 1.0372+0.528 * 0.9601+0.404 * 0.9395+0.892 * 0.923+0.115 * 1.0036
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9959+4.679 * -0.0413-0.327 * 1.0524
=-2.77

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $4,373 Mil.
Revenue was 16102 + 15755 + 16915 + 16527 = $65,299 Mil.
Gross Profit was 7720 + 7840 + 8455 + 8375 = $32,390 Mil.
Total Current Assets was $33,782 Mil.
Total Assets was $127,136 Mil.
Property, Plant and Equipment(Net PPE) was $19,385 Mil.
Depreciation, Depletion and Amortization(DDA) was $3,078 Mil.
Selling, General & Admin. Expense(SGA) was $18,949 Mil.
Total Current Liabilities was $30,770 Mil.
Long-Term Debt was $18,945 Mil.
Net Income was 1951 + 2750 + 3206 + 2601 = $10,508 Mil.
Non Operating Income was 287 + 21 + 35 + -18 = $325 Mil.
Cash Flow from Operations was 4139 + 3278 + 4480 + 3538 = $15,435 Mil.
Accounts Receivable was $4,568 Mil.
Revenue was 16553 + 16930 + 18495 + 18771 = $70,749 Mil.
Gross Profit was 7716 + 8003 + 8937 + 9037 = $33,693 Mil.
Total Current Assets was $29,646 Mil.
Total Assets was $129,495 Mil.
Property, Plant and Equipment(Net PPE) was $19,655 Mil.
Depreciation, Depletion and Amortization(DDA) was $3,134 Mil.
Selling, General & Admin. Expense(SGA) was $20,616 Mil.
Total Current Liabilities was $29,790 Mil.
Long-Term Debt was $18,327 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)
=(4373 / 65299) / (4568 / 70749)
=0.06696887 / 0.06456628
=1.0372

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)
=(33693 / 70749) / (32390 / 65299)
=0.47623288 / 0.49602597
=0.9601

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 - (33782 + 19385) / 127136) / (1 - (29646 + 19655) / 129495)
=0.58181003 / 0.6192826
=0.9395

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
=65299 / 70749
=0.923

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))
=(3134 / (3134 + 19655)) / (3078 / (3078 + 19385))
=0.13752249 / 0.13702533
=1.0036

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)
=(18949 / 65299) / (20616 / 70749)
=0.29018821 / 0.29139634
=0.9959

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)
=((18945 + 30770) / 127136) / ((18327 + 29790) / 129495)
=0.39103794 / 0.37157419
=1.0524

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
=(10508 - 325 - 15435) / 127136
=-0.0413

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.

Procter & Gamble Co has a M-score of -2.77 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.

Procter & Gamble Co Annual Data

Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14Jun15Jun16
DSRI 1.03290.95410.92010.88821.14480.95641.09781.05660.75221.0372
GMI 0.98881.00761.04210.95361.02181.02730.98841.05350.99830.9601
AQI 1.00281.00311.00991.01460.97720.98970.98810.93170.98890.9395
SGI 1.1211.06890.93821.02931.02741.01110.9770.92870.95090.923
DEPI 0.88921.03820.97280.98321.18230.86561.12310.98010.89761.0036
SGAI 0.99380.9830.94321.07321.00260.9981.02420.88881.01020.9959
LVGI 0.95040.96641.00950.93141.00120.97541.01491.05151.00131.0524
TATA -0.0265-0.0236-0.0139-0.0258-0.0135-0.0205-0.0323-0.0175-0.0619-0.0413
M-score -2.47-2.55-2.64-2.69-2.36-2.60-2.57-2.57-3.06-2.77

Procter & Gamble Co Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 0.99981.04741.03870.94370.90720.75890.81230.85590.94711.0372
GMI 1.00921.05411.05681.0681.07460.99770.97850.95670.93450.9601
AQI 0.96280.93170.95920.92560.93490.98890.91330.94680.95790.9395
SGI 0.95280.93690.91010.88960.86580.94260.93850.95070.97140.923
DEPI 1.00160.98010.96350.91940.90230.89760.91430.9510.9911.0036
SGAI 0.98410.88680.89230.88720.87041.01251.0121.00741.03050.9959
LVGI 1.061.05151.0091.04951.0171.00131.02471.00211.05291.0524
TATA -0.0208-0.0175-0.0373-0.0464-0.0478-0.0619-0.0563-0.0581-0.0518-0.0413
M-score -2.65-2.57-2.67-2.85-2.89-3.06-3.04-2.98-2.87-2.77
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
FEEDBACK