Switch to:
R.R.Donnelley & Sons Co (NYSE:RRD)
Beneish M-Score
-2.65 (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.

R.R.Donnelley & Sons Co has a M-score of -2.65 suggests that the company is not a manipulator.

RRD' s Beneish M-Score Range Over the Past 10 Years
Min: -3.78   Max: -1.18
Current: -2.65

-3.78
-1.18

During the past 13 years, the highest Beneish M-Score of R.R.Donnelley & Sons Co was -1.18. The lowest was -3.78. And the median was -2.85.


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 R.R.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 * 1.0525+0.528 * 0.9944+0.404 * 1.0125+0.892 * 0.9734+0.115 * 0.9715
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0407+4.679 * -0.0375-0.327 * 1.0334
=-2.65

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $2,109 Mil.
Revenue was 2772.4 + 2729.7 + 2651.4 + 2934.6 = $11,088 Mil.
Gross Profit was 607.7 + 604.9 + 569.3 + 648.6 = $2,431 Mil.
Total Current Assets was $3,313 Mil.
Total Assets was $7,473 Mil.
Property, Plant and Equipment(Net PPE) was $1,342 Mil.
Depreciation, Depletion and Amortization(DDA) was $425 Mil.
Selling, General & Admin. Expense(SGA) was $1,428 Mil.
Total Current Liabilities was $2,222 Mil.
Long-Term Debt was $3,635 Mil.
Net Income was -7.1 + -14.5 + 39.8 + 71 = $89 Mil.
Non Operating Income was -84.7 + -1 + 0 + -0.4 = $-86 Mil.
Cash Flow from Operations was 108.1 + 92.5 + -192.8 + 447.8 = $456 Mil.
Accounts Receivable was $2,059 Mil.
Revenue was 2828 + 2748.1 + 2746.1 + 3069.3 = $11,392 Mil.
Gross Profit was 619.9 + 615.8 + 579.7 + 667.6 = $2,483 Mil.
Total Current Assets was $3,185 Mil.
Total Assets was $7,471 Mil.
Property, Plant and Equipment(Net PPE) was $1,504 Mil.
Depreciation, Depletion and Amortization(DDA) was $459 Mil.
Selling, General & Admin. Expense(SGA) was $1,409 Mil.
Total Current Liabilities was $2,450 Mil.
Long-Term Debt was $3,216 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)
=(2109.3 / 11088.1) / (2059 / 11391.5)
=0.19023097 / 0.1807488
=1.0525

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)
=(2483 / 11391.5) / (2430.5 / 11088.1)
=0.21796954 / 0.21919896
=0.9944

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 - (3312.5 + 1342.3) / 7472.5) / (1 - (3184.5 + 1504) / 7470.6)
=0.37707595 / 0.3724065
=1.0125

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
=11088.1 / 11391.5
=0.9734

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))
=(458.5 / (458.5 + 1504)) / (425 / (425 + 1342.3))
=0.23363057 / 0.24047983
=0.9715

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)
=(1427.5 / 11088.1) / (1409.2 / 11391.5)
=0.12874162 / 0.12370627
=1.0407

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)
=((3635.3 + 2221.6) / 7472.5) / ((3216.1 + 2450.3) / 7470.6)
=0.78379391 / 0.75849329
=1.0334

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
=(89.2 - -86.1 - 455.6) / 7472.5
=-0.0375

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.

R.R.Donnelley & Sons Co has a M-score of -2.65 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 local exchange's currency.

R.R.Donnelley & Sons Co Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.96971.07010.96010.97641.11580.88291.05750.95121.00251.0139
GMI 1.02711.02511.0161.06821.02430.99891.04031.02631.01161.0042
AQI 1.04940.93550.79561.04551.03481.00420.87990.84461.15181.0489
SGI 1.10511.24370.99950.85111.01641.05910.96331.02531.10720.9701
DEPI 0.93240.9880.90030.98411.00880.88040.99640.98270.98030.9982
SGAI 0.95070.9540.93761.04781.01541.03910.92581.04511.09090.9391
LVGI 0.92411.27851.13770.9581.03011.13121.12661.0660.94311.0017
TATA -0.0365-0.1016-0.127-0.191-0.0573-0.1219-0.1824-0.0517-0.0682-0.0628
M-score -2.53-2.77-3.23-3.47-2.61-3.17-3.37-2.82-2.63-2.76

R.R.Donnelley & Sons Co Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 1.08391.04161.00250.89240.90160.94051.01391.02861.02941.0525
GMI 1.02321.01091.01161.00881.011.01051.00420.99630.99420.9944
AQI 0.94520.96431.15181.051.05031.0581.04891.02831.03061.0125
SGI 1.0651.08711.10721.09991.05251.0090.97010.9560.96720.9734
DEPI 1.10551.04220.98030.83640.94130.96830.99821.01740.93870.9715
SGAI 1.05751.03611.09091.07791.06641.07110.93910.94391.03921.0407
LVGI 1.02161.01610.94310.98820.97380.98231.00170.9991.01951.0334
TATA -0.0535-0.0443-0.0682-0.0634-0.0699-0.0709-0.0628-0.0592-0.053-0.0375
M-score -2.61-2.59-2.63-2.79-2.83-2.84-2.76-2.75-2.74-2.65
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