Switch to:
Sherwin-Williams Co (NYSE:SHW)
Beneish M-Score
-2.74 (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 -2.74 suggests that the company is not a manipulator.

SHW' s Beneish M-Score Range Over the Past 10 Years
Min: -3.23   Max: -2.15
Current: -2.74

-3.23
-2.15

During the past 13 years, the highest Beneish M-Score of Sherwin-Williams Co was -2.15. The lowest was -3.23. 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 * 0.9982+0.528 * 0.9623+0.404 * 0.867+0.892 * 1.033+0.115 * 1.0451
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0172+4.679 * -0.051-0.327 * 0.9263
=-2.74

* 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 $1,458 Mil.
Revenue was 3279.462 + 3219.525 + 2574.024 + 2604.596 = $11,678 Mil.
Gross Profit was 1636.289 + 1635.793 + 1261.745 + 1322.239 = $5,856 Mil.
Total Current Assets was $3,708 Mil.
Total Assets was $6,918 Mil.
Property, Plant and Equipment(Net PPE) was $1,084 Mil.
Depreciation, Depletion and Amortization(DDA) was $200 Mil.
Selling, General & Admin. Expense(SGA) was $4,106 Mil.
Total Current Liabilities was $2,516 Mil.
Long-Term Debt was $1,910 Mil.
Net Income was 386.733 + 378.064 + 147.128 + 198.017 = $1,110 Mil.
Non Operating Income was 0.725 + 0.052 + -17.78 + -31.857 = $-49 Mil.
Cash Flow from Operations was 456.551 + 589.79 + -79.807 + 544.959 = $1,511 Mil.
Accounts Receivable was $1,414 Mil.
Revenue was 3152.285 + 3132.139 + 2450.284 + 2569.412 = $11,304 Mil.
Gross Profit was 1574.552 + 1529.986 + 1132.449 + 1217.975 = $5,455 Mil.
Total Current Assets was $2,924 Mil.
Total Assets was $6,102 Mil.
Property, Plant and Equipment(Net PPE) was $1,015 Mil.
Depreciation, Depletion and Amortization(DDA) was $198 Mil.
Selling, General & Admin. Expense(SGA) was $3,907 Mil.
Total Current Liabilities was $2,294 Mil.
Long-Term Debt was $1,920 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)
=(1458.073 / 11677.607) / (1413.946 / 11304.12)
=0.1248606 / 0.12508236
=0.9982

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)
=(5454.962 / 11304.12) / (5856.066 / 11677.607)
=0.48256406 / 0.50147826
=0.9623

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 - (3708.231 + 1083.922) / 6917.771) / (1 - (2924.236 + 1015.167) / 6102.023)
=0.30726921 / 0.35441033
=0.867

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
=11677.607 / 11304.12
=1.033

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))
=(197.514 / (197.514 + 1015.167)) / (200.106 / (200.106 + 1083.922))
=0.16287383 / 0.1558424
=1.0451

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)
=(4105.927 / 11677.607) / (3907.375 / 11304.12)
=0.35160688 / 0.34565937
=1.0172

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)
=((1909.713 + 2515.807) / 6917.771) / ((1920.15 + 2294.196) / 6102.023)
=0.63973208 / 0.69064735
=0.9263

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
=(1109.942 - -48.86 - 1511.493) / 6917.771
=-0.051

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 -2.74 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.

Sherwin-Williams Co Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.98410.9820.88721.01681.20140.9580.9590.99520.94250.9674
GMI 0.97980.97251.02530.95321.02751.04790.96830.97330.97680.9465
AQI 0.86781.13090.95971.07630.96580.99230.8841.0151.07580.9695
SGI 1.08611.0250.99680.8891.09621.12721.08771.06831.09271.0188
DEPI 1.13320.97330.95310.93441.11070.97771.01631.00760.95241.0187
SGAI 0.99461.01511.02171.07070.98190.96281.01220.99581.00891.0047
LVGI 1.01411.05841.01180.9921.04241.02121.05031.01651.16531.0512
TATA -0.0432-0.0538-0.0893-0.0932-0.0458-0.0571-0.0428-0.0514-0.0339-0.0618
M-score -2.67-2.71-3.02-3.01-2.42-2.65-2.72-2.68-2.65-2.84

Sherwin-Williams Co Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 0.97780.94360.94250.97380.98260.97810.96741.02270.99130.9982
GMI 0.9790.980.97680.97420.96510.95380.94650.94010.94380.9623
AQI 1.06451.13871.07580.99670.98481.00670.96950.97060.91510.867
SGI 1.10381.10721.09271.07981.05491.0261.01881.02231.02191.033
DEPI 0.9980.95010.95240.95650.97990.99941.01871.05591.05381.0451
SGAI 1.01731.01291.00891.00260.99731.00221.00471.00821.01451.0172
LVGI 1.08031.08291.16531.32971.2031.09311.05120.89940.93190.9263
TATA -0.0515-0.0562-0.0339-0.0354-0.0217-0.0115-0.0621-0.0495-0.0686-0.051
M-score -2.66-2.69-2.65-2.73-2.64-2.58-2.84-2.68-2.83-2.74
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