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RR Donnelley & Sons Co (NAS:RRD)
Beneish M-Score
-2.79 (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.

RR Donnelley & Sons Co has a M-score of -2.79 suggests that the company is not a manipulator.

RRD' s 10-Year Beneish M-Score Range
Min: -3.78   Max: -1.18
Current: -2.79

-3.78
-1.18

During the past 13 years, the highest Beneish M-Score of RR Donnelley & Sons Co was -1.18. The lowest was -3.78. And the median was -2.89.


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 RR Donnelley & Sons 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 * 0.8924+0.528 * 1.0088+0.404 * 1.05+0.892 * 1.0999+0.115 * 0.8364
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0779+4.679 * -0.0634-0.327 * 0.9882
=-2.79

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was $1,982 Mil.
Revenue was 2746.1 + 3069.3 + 2957.8 + 2902.5 = $11,676 Mil.
Gross Profit was 579.7 + 667.6 + 647.6 + 662.2 = $2,557 Mil.
Total Current Assets was $3,044 Mil.
Total Assets was $7,205 Mil.
Property, Plant and Equipment(Net PPE) was $1,456 Mil.
Depreciation, Depletion and Amortization(DDA) was $472 Mil.
Selling, General & Admin. Expense(SGA) was $1,441 Mil.
Total Current Liabilities was $2,031 Mil.
Long-Term Debt was $3,431 Mil.
Net Income was 22.3 + 19.5 + 62.2 + 64.7 = $169 Mil.
Non Operating Income was -28.3 + -0.7 + -2 + -2.3 = $-33 Mil.
Cash Flow from Operations was -144.3 + 468.8 + 184.2 + 150.1 = $659 Mil.
Accounts Receivable was $2,019 Mil.
Revenue was 2673.8 + 2755.3 + 2614.9 + 2571.6 = $10,616 Mil.
Gross Profit was 573.2 + 603.6 + 570.4 + 598.2 = $2,345 Mil.
Total Current Assets was $3,178 Mil.
Total Assets was $7,594 Mil.
Property, Plant and Equipment(Net PPE) was $1,700 Mil.
Depreciation, Depletion and Amortization(DDA) was $438 Mil.
Selling, General & Admin. Expense(SGA) was $1,216 Mil.
Total Current Liabilities was $2,198 Mil.
Long-Term Debt was $3,627 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)
=(1981.6 / 11675.7) / (2018.9 / 10615.6)
=0.16972002 / 0.19018237
=0.8924

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)
=(667.6 / 10615.6) / (579.7 / 11675.7)
=0.220939 / 0.21901042
=1.0088

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 - (3043.7 + 1455.5) / 7205.3) / (1 - (3178.3 + 1699.6) / 7594.4)
=0.37557076 / 0.35769778
=1.05

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
=11675.7 / 10615.6
=1.0999

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))
=(437.7 / (437.7 + 1699.6)) / (471.9 / (471.9 + 1455.5))
=0.20479109 / 0.24483761
=0.8364

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)
=(1441.4 / 11675.7) / (1215.8 / 10615.6)
=0.12345298 / 0.11452956
=1.0779

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)
=((3431 + 2030.9) / 7205.3) / ((3627.2 + 2198.3) / 7594.4)
=0.75803922 / 0.76707837
=0.9882

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
=(168.7 - -33.3 - 658.8) / 7205.3
=-0.0634

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.

RR Donnelley & Sons Co has a M-score of -2.79 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.

RR Donnelley & Sons Co Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.03610.96971.07010.96010.97641.11580.88291.05750.95121.0025
GMI 0.94991.02711.02511.0161.06821.02430.99891.04031.02631.0116
AQI 1.0451.04940.93550.79561.04551.03481.00420.87990.84461.1601
SGI 1.1781.10511.24370.99950.85111.01641.05910.96331.02531.1072
DEPI 1.00660.93240.9880.90030.98411.00880.88040.99640.98270.9803
SGAI 0.94880.95070.9540.93761.04781.01541.03910.92581.04511.0909
LVGI 1.24290.92411.27851.13770.9581.03011.13121.12661.0660.9444
TATA -0.0856-0.0365-0.1016-0.127-0.1642-0.0573-0.1223-0.1824-0.0517-0.0679
M-score -2.77-2.53-2.77-3.23-3.34-2.61-3.17-3.37-2.82-2.63

RR Donnelley & Sons Co Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 1.05751.00320.93170.9320.95121.05121.08391.04161.00250.8924
GMI 1.04031.03731.02951.03541.02631.02211.02321.01091.01161.0088
AQI 0.87990.90330.89980.86690.84460.94670.94520.96431.16011.05
SGI 0.96330.970.98291.00991.02531.03711.0651.08711.10721.0999
DEPI 0.99640.98030.97540.97020.98271.13941.10551.04220.98030.8364
SGAI 0.92580.95180.98241.02711.04511.06441.05751.03611.09091.0779
LVGI 1.12661.12421.10891.1051.0661.02121.02161.01610.94440.9882
TATA -0.1854-0.1803-0.1995-0.208-0.0517-0.0531-0.0535-0.0443-0.0679-0.0634
M-score -3.38-3.40-3.55-3.58-2.82-2.66-2.61-2.59-2.63-2.79
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