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Xerox Corp (NYSE:XRX)
Beneish M-Score
-2.59 (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.

Xerox Corp has a M-score of -2.59 suggests that the company is not a manipulator.

XRX' s Beneish M-Score Range Over the Past 10 Years
Min: -3.76   Max: -1.11
Current: -2.59

-3.76
-1.11

During the past 13 years, the highest Beneish M-Score of Xerox Corp was -1.11. The lowest was -3.76. And the median was -2.47.


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 Xerox Corp 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 * 0.988+0.528 * 1.0952+0.404 * 1.0823+0.892 * 0.9219+0.115 * 1.0451
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0178+4.679 * -0.0215-0.327 * 1.0467
=-2.59

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $2,319 Mil.
Revenue was 4653 + 4333 + 4590 + 4469 = $18,045 Mil.
Gross Profit was 1456 + 987 + 1426 + 1394 = $5,263 Mil.
Total Current Assets was $6,685 Mil.
Total Assets was $24,817 Mil.
Property, Plant and Equipment(Net PPE) was $1,491 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,190 Mil.
Selling, General & Admin. Expense(SGA) was $3,559 Mil.
Total Current Liabilities was $5,254 Mil.
Long-Term Debt was $6,382 Mil.
Net Income was 271 + -34 + 12 + 225 = $474 Mil.
Non Operating Income was -71 + -125 + -312 + -96 = $-604 Mil.
Cash Flow from Operations was 878 + 271 + 349 + 113 = $1,611 Mil.
Accounts Receivable was $2,546 Mil.
Revenue was 4040 + 5120 + 5292 + 5121 = $19,573 Mil.
Gross Profit was 1502 + 1575 + 1628 + 1547 = $6,252 Mil.
Total Current Assets was $8,874 Mil.
Total Assets was $27,658 Mil.
Property, Plant and Equipment(Net PPE) was $1,648 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,426 Mil.
Selling, General & Admin. Expense(SGA) was $3,793 Mil.
Total Current Liabilities was $6,076 Mil.
Long-Term Debt was $6,314 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)
=(2319 / 18045) / (2546 / 19573)
=0.12851205 / 0.13007715
=0.988

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)
=(987 / 19573) / (1456 / 18045)
=0.31941961 / 0.29165974
=1.0952

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 - (6685 + 1491) / 24817) / (1 - (8874 + 1648) / 27658)
=0.67054841 / 0.61956758
=1.0823

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
=18045 / 19573
=0.9219

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))
=(1426 / (1426 + 1648)) / (1190 / (1190 + 1491))
=0.4638907 / 0.44386423
=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)
=(3559 / 18045) / (3793 / 19573)
=0.19722915 / 0.19378736
=1.0178

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)
=((6382 + 5254) / 24817) / ((6314 + 6076) / 27658)
=0.46887214 / 0.44797165
=1.0467

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
=(474 - -604 - 1611) / 24817
=-0.0215

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.

Xerox Corp has a M-score of -2.59 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.

Xerox Corp Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.06311.15220.7370.98261.07180.87971.11390.92541.10.9863
GMI 1.01541.00161.00910.98081.15241.01741.0491.04060.97031.096
AQI 0.95511.08061.00430.9461.24741.03140.9830.97320.97241.0823
SGI 1.01541.08971.07330.86211.42521.04590.98960.95730.91160.9235
DEPI 1.16971.03770.92930.91410.82030.9030.96040.95550.86531.0451
SGAI 0.96030.98730.97971.06150.77690.93590.96361.00781.00441.0174
LVGI 0.9990.98071.16380.97320.84191.00230.9950.97441.03311.0467
TATA -0.013-0.02940.059-0.0373-0.02740.0071-0.0177-0.0281-0.0208-0.0237
M-score -2.45-2.35-2.43-2.84-1.91-2.50-2.44-2.71-2.62-2.60

Xerox Corp Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 0.91881.02321.00541.05271.1061.1511.16431.04490.9880.9564
GMI 1.04481.0351.03621.04590.96710.96020.9511.0051.09521.1179
AQI 0.97320.97970.99970.99430.97240.98240.98041.01431.08231.0624
SGI 0.96420.960.96110.96170.90660.88610.85760.82610.92190.9438
DEPI 0.95550.95650.96110.94180.86530.88090.92370.94081.04511.0502
SGAI 1.00470.98830.9780.96821.00711.04211.07631.10681.01780.9971
LVGI 0.97440.980.97781.04141.03311.03961.0671.09131.04671.0285
TATA -0.0266-0.04-0.0352-0.0236-0.0207-0.0164-0.0197-0.0191-0.0215-0.0185
M-score -2.70-2.67-2.65-2.57-2.62-2.58-2.63-2.73-2.59-2.57
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