Switch to:
Xerox Corporation (NYSE:XRX)
Beneish M-Score
-2.63 (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 Corporation has a M-score of -2.63 suggests that the company is not a manipulator.

XRX' s 10-Year Beneish M-Score Range
Min: -3.84   Max: -1
Current: -2.63

-3.84
-1

During the past 13 years, the highest Beneish M-Score of Xerox Corporation was -1.00. The lowest was -3.84. And the median was -2.54.


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 Corporation 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 * 1.057+0.528 * 1.0134+0.404 * 0.9824+0.892 * 0.9649+0.115 * 0.8809
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9748+4.679 * -0.0314-0.327 * 1.0396
=-2.63

* 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 $2,721 Mil.
Revenue was 4469 + 4040 + 5120 + 5292 = $18,921 Mil.
Gross Profit was 1394 + 1502 + 1575 + 1628 = $6,099 Mil.
Total Current Assets was $8,358 Mil.
Total Assets was $26,657 Mil.
Property, Plant and Equipment(Net PPE) was $1,583 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,377 Mil.
Selling, General & Admin. Expense(SGA) was $3,747 Mil.
Total Current Liabilities was $5,731 Mil.
Long-Term Debt was $6,265 Mil.
Net Income was 225 + 156 + 266 + 266 = $913 Mil.
Non Operating Income was -6 + -128 + -18 + 11 = $-141 Mil.
Cash Flow from Operations was 113 + 857 + 595 + 325 = $1,890 Mil.
Accounts Receivable was $2,668 Mil.
Revenue was 4771 + 4213 + 5235 + 5391 = $19,610 Mil.
Gross Profit was 1503 + 1556 + 1650 + 1697 = $6,406 Mil.
Total Current Assets was $8,462 Mil.
Total Assets was $28,868 Mil.
Property, Plant and Equipment(Net PPE) was $1,979 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,374 Mil.
Selling, General & Admin. Expense(SGA) was $3,984 Mil.
Total Current Liabilities was $6,600 Mil.
Long-Term Debt was $5,896 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)
=(2721 / 18921) / (2668 / 19610)
=0.14380847 / 0.13605303
=1.057

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)
=(1502 / 19610) / (1394 / 18921)
=0.32667007 / 0.32234026
=1.0134

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 - (8358 + 1583) / 26657) / (1 - (8462 + 1979) / 28868)
=0.62707732 / 0.63831925
=0.9824

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
=18921 / 19610
=0.9649

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))
=(1374 / (1374 + 1979)) / (1377 / (1377 + 1583))
=0.40978228 / 0.4652027
=0.8809

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)
=(3747 / 18921) / (3984 / 19610)
=0.19803393 / 0.20316165
=0.9748

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)
=((6265 + 5731) / 26657) / ((5896 + 6600) / 28868)
=0.45001313 / 0.43286684
=1.0396

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
=(913 - -141 - 1890) / 26657
=-0.0314

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 Corporation has a M-score of -2.63 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 Corporation Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.04051.06311.15220.7370.9041.1650.87971.01331.091.0267
GMI 1.09551.01541.00161.00910.98081.11561.0511.05950.98581.0141
AQI 1.07710.95511.08061.00430.9461.24741.03140.9830.97320.9724
SGI 0.9431.01541.08971.07330.86211.42521.04590.96070.92040.9767
DEPI 0.99721.16971.03770.92930.91410.82030.9030.96040.95550.8653
SGAI 1.0370.96030.98730.97971.06150.77690.93590.97591.04970.9522
LVGI 0.89030.9990.98071.16380.97320.84191.00230.9950.97441.0331
TATA -0.0144-0.0193-0.03470.0234-0.067-0.0383-0.0011-0.0447-0.0408-0.0347
M-score -2.45-2.48-2.38-2.60-3.05-1.90-2.52-2.69-2.68-2.66

Xerox Corporation Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 1.00530.97931.05320.95951.09671.08241.07131.12691.04541.057
GMI 1.06461.0541.05721.04770.98210.96970.96660.97261.00261.0134
AQI 0.9831.00820.98370.99820.97320.97970.99970.99430.97240.9824
SGI 0.96830.95340.96490.97650.91470.90750.9020.89830.95920.9649
DEPI 0.96040.95190.95680.96870.95550.95650.96110.94180.86530.8809
SGAI 0.97230.99230.99050.99221.05321.04371.03591.02730.96540.9748
LVGI 0.9950.96370.95910.91870.97440.980.97781.04141.03311.0396
TATA -0.0442-0.043-0.0563-0.0702-0.0408-0.0529-0.0469-0.0342-0.0345-0.0314
M-score -2.68-2.70-2.69-2.82-2.68-2.76-2.74-2.66-2.67-2.63
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)

GuruFocus Premium Plus Membership

FEEDBACK