Switch to:
Sherwin-Williams Co (NYSE:SHW)
Beneish M-Score
-2.68 (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.

Sherwin-Williams Co has a M-score of -2.68 suggests that the company is not a manipulator.

SHW' s 10-Year Beneish M-Score Range
Min: -3.12   Max: -2.15
Current: -2.68

-3.12
-2.15

During the past 13 years, the highest Beneish M-Score of Sherwin-Williams Co was -2.15. The lowest was -3.12. And the median was -2.67.


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 Sherwin-Williams 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 * 0.9425+0.528 * 0.9768+0.404 * 1.0758+0.892 * 1.0927+0.115 * 0.9524
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0089+4.679 * -0.0405-0.327 * 1.1653
=-2.68

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $1,131 Mil.
Revenue was 2569.412 + 3150.57 + 3042.995 + 2366.556 = $11,130 Mil.
Gross Profit was 1217.975 + 1470.955 + 1409.653 + 1065.901 = $5,164 Mil.
Total Current Assets was $2,567 Mil.
Total Assets was $5,706 Mil.
Property, Plant and Equipment(Net PPE) was $1,021 Mil.
Depreciation, Depletion and Amortization(DDA) was $199 Mil.
Selling, General & Admin. Expense(SGA) was $3,823 Mil.
Total Current Liabilities was $2,681 Mil.
Long-Term Debt was $1,123 Mil.
Net Income was 132.743 + 326.24 + 291.447 + 115.457 = $866 Mil.
Non Operating Income was -3.837 + 14.593 + 5.147 + -0.503 = $15 Mil.
Cash Flow from Operations was 200.218 + 549.73 + 414.699 + -83.119 = $1,082 Mil.
Accounts Receivable was $1,098 Mil.
Revenue was 2457.058 + 2847.417 + 2713.889 + 2167.168 = $10,186 Mil.
Gross Profit was 1124.178 + 1295.958 + 1233.579 + 962.851 = $4,617 Mil.
Total Current Assets was $3,159 Mil.
Total Assets was $6,383 Mil.
Property, Plant and Equipment(Net PPE) was $1,021 Mil.
Depreciation, Depletion and Amortization(DDA) was $188 Mil.
Selling, General & Admin. Expense(SGA) was $3,468 Mil.
Total Current Liabilities was $2,529 Mil.
Long-Term Debt was $1,122 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)
=(1130.565 / 11129.533) / (1097.751 / 10185.532)
=0.10158243 / 0.10777552
=0.9425

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)
=(1470.955 / 10185.532) / (1217.975 / 11129.533)
=0.45324741 / 0.46403421
=0.9768

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 - (2566.78 + 1021.03) / 5706.052) / (1 - (3158.717 + 1021.383) / 6382.507)
=0.37122725 / 0.34506927
=1.0758

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
=11129.533 / 10185.532
=1.0927

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))
=(187.794 / (187.794 + 1021.383)) / (198.945 / (198.945 + 1021.03))
=0.15530729 / 0.16307301
=0.9524

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)
=(3822.966 / 11129.533) / (3467.681 / 10185.532)
=0.34349743 / 0.34045163
=1.0089

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)
=((1122.715 + 2680.666) / 5706.052) / ((1122.373 + 2528.557) / 6382.507)
=0.66655211 / 0.57202131
=1.1653

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
=(865.887 - 15.4 - 1081.528) / 5706.052
=-0.0405

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.

Sherwin-Williams Co has a M-score of -2.68 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.

Sherwin-Williams Co Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.94990.98410.9820.88721.01681.20140.9580.9590.99520.9425
GMI 1.03140.97980.97251.02530.95321.02751.04790.96830.97330.9768
AQI 0.95490.86781.13090.95971.07630.96580.99230.8841.0151.0758
SGI 1.17611.08611.0250.99680.8891.09621.12721.08771.06831.0927
DEPI 0.94351.13320.97330.95310.93441.11070.97771.01631.00760.9524
SGAI 0.9560.99461.01511.02171.07070.98190.96281.01220.99581.0089
LVGI 0.99431.01411.05841.01180.9921.04241.02121.05031.01651.1653
TATA -0.0459-0.0432-0.0538-0.0893-0.0932-0.0458-0.0571-0.0428-0.0517-0.0405
M-score -2.58-2.67-2.71-3.02-3.01-2.42-2.65-2.72-2.68-2.68

Sherwin-Williams Co Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 0.98540.9590.94221.00221.00680.99520.95620.97780.94360.9425
GMI 0.98750.96830.95750.96140.96810.97330.97980.9790.980.9768
AQI 0.99080.8840.92660.89920.83931.0151.03981.06451.13871.0758
SGI 1.09221.08771.05741.04761.06051.06831.08571.10381.10721.0927
DEPI 1.05371.01631.00541.00431.02751.00761.00210.9980.95010.9524
SGAI 0.97421.01191.02331.02081.0230.99581.00471.01731.01291.0089
LVGI 0.95361.05030.99630.99771.12111.01651.0431.08031.08291.1653
TATA -0.0536-0.0428-0.0506-0.0497-0.0567-0.0517-0.0543-0.0519-0.0566-0.0405
M-score -2.65-2.72-2.77-2.73-2.81-2.68-2.71-2.67-2.69-2.68
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