Switch to:
Pentair PLC (NYSE:PNR)
Beneish M-Score
-2.72 (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.

Pentair PLC has a M-score of -2.72 suggests that the company is not a manipulator.

PNR' s 10-Year Beneish M-Score Range
Min: -2.94   Max: -1.23
Current: -2.72

-2.94
-1.23

During the past 13 years, the highest Beneish M-Score of Pentair PLC was -1.23. The lowest was -2.94. And the median was -2.51.


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 Pentair PLC 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 * 0.779+0.528 * 0.8609+0.404 * 1.0092+0.892 * 1.161+0.115 * 0.9818
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.7929+4.679 * -0.0297-0.327 * 1.0251
=-2.72

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $1,302 Mil.
Revenue was 1910.8 + 1725.2 + 1916.7 + 1824.8 = $7,378 Mil.
Gross Profit was 658.9 + 578.3 + 644.1 + 637.6 = $2,519 Mil.
Total Current Assets was $3,166 Mil.
Total Assets was $11,617 Mil.
Property, Plant and Equipment(Net PPE) was $1,152 Mil.
Depreciation, Depletion and Amortization(DDA) was $264 Mil.
Selling, General & Admin. Expense(SGA) was $1,505 Mil.
Total Current Liabilities was $1,777 Mil.
Long-Term Debt was $2,739 Mil.
Net Income was 161.5 + 118.6 + 158.2 + 172.8 = $611 Mil.
Non Operating Income was 0.2 + 7.6 + 3.1 + 0.6 = $12 Mil.
Cash Flow from Operations was 414.4 + 0.6 + 285.5 + 243.7 = $944 Mil.
Accounts Receivable was $1,440 Mil.
Revenue was 1963.7 + 1774.5 + 1750.932 + 865.512 = $6,355 Mil.
Gross Profit was 667.4 + 523.8 + 398.668 + 278.077 = $1,868 Mil.
Total Current Assets was $3,217 Mil.
Total Assets was $11,667 Mil.
Property, Plant and Equipment(Net PPE) was $1,186 Mil.
Depreciation, Depletion and Amortization(DDA) was $266 Mil.
Selling, General & Admin. Expense(SGA) was $1,635 Mil.
Total Current Liabilities was $1,687 Mil.
Long-Term Debt was $2,737 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)
=(1302.2 / 7377.5) / (1439.9 / 6354.644)
=0.17650966 / 0.22659019
=0.779

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)
=(578.3 / 6354.644) / (658.9 / 7377.5)
=0.29394959 / 0.34143002
=0.8609

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 - (3165.9 + 1151.6) / 11616.8) / (1 - (3216.5 + 1186.1) / 11666.6)
=0.62833999 / 0.62263213
=1.0092

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
=7377.5 / 6354.644
=1.161

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))
=(265.849 / (265.849 + 1186.1)) / (264 / (264 + 1151.6))
=0.18309803 / 0.18649336
=0.9818

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)
=(1505.4 / 7377.5) / (1635.381 / 6354.644)
=0.20405286 / 0.2573521
=0.7929

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)
=((2739 + 1777.1) / 11616.8) / ((2737.4 + 1686.8) / 11666.6)
=0.38875594 / 0.37921931
=1.0251

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
=(611.1 - 11.5 - 944.2) / 11616.8
=-0.0297

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.

Pentair PLC has a M-score of -2.72 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.

Pentair PLC Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.12780.82660.93031.03830.991.22881.0090.96551.94870.5979
GMI 0.86730.99861.00180.95290.99611.0380.94970.98851.08050.8696
AQI 1.08591.0020.98121.0511.01821.01850.96320.99630.961.0087
SGI 0.83621.29341.07061.07740.98630.80321.12561.14051.27761.6937
DEPI 1.04620.81241.01920.99010.92410.84281.18010.93291.84910.6005
SGAI 1.19720.98471.05561.00821.04691.04050.92691.03781.44730.7962
LVGI 0.90610.9760.94421.08470.8940.89190.98411.34960.79761.0474
TATA -0.0178-0.021-0.0143-0.0317-0.014-0.0349-0.0188-0.0628-0.0086-0.0341
M-score -2.63-2.49-2.54-2.56-2.54-2.57-2.45-2.82-1.29-2.48

Pentair PLC Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.96030.87232.24551.94871.49831.40830.47530.59790.65650.779
GMI 0.98910.98050.96761.08051.10561.08081.05620.86960.8340.8609
AQI 0.9980.97570.89910.960.9810.97491.11011.00871.00861.0092
SGI 1.13181.10161.05561.27761.51291.78712.07141.69371.39341.161
DEPI 0.89840.81242.38441.84911.46961.22870.31740.60050.79530.9818
SGAI 1.07221.07261.13491.44731.40841.36221.20920.79620.77670.7929
LVGI 1.32710.99640.72690.79760.80860.91751.18811.04741.09071.0251
TATA -0.0539-0.0627-0.0251-0.0086-0.0154-0.0198-0.0213-0.0312-0.0259-0.0297
M-score -2.79-2.85-1.23-1.29-1.54-1.47-2.21-2.47-2.67-2.72
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)
Free 7-day Trial
FEEDBACK
Email Hide