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Xerox Corp (NYSE:XRX)
Beneish M-Score
-2.69 (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 -2.69 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: -2.69

-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 -2.50.


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 * 0.8489+0.528 * 1.1063+0.404 * 1.0624+0.892 * 0.9282+0.115 * 1.0502
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0108+4.679 * -0.0185-0.327 * 1.0285
=-2.69

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $2,144 Mil.
Revenue was 4281 + 4653 + 4333 + 4590 = $17,857 Mil.
Gross Profit was 1280 + 1456 + 987 + 1426 = $5,149 Mil.
Total Current Assets was $6,808 Mil.
Total Assets was $24,857 Mil.
Property, Plant and Equipment(Net PPE) was $1,489 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,184 Mil.
Selling, General & Admin. Expense(SGA) was $3,526 Mil.
Total Current Liabilities was $6,146 Mil.
Long-Term Debt was $5,359 Mil.
Net Income was 34 + 271 + -34 + 12 = $283 Mil.
Non Operating Income was -221 + -71 + -125 + -312 = $-729 Mil.
Cash Flow from Operations was -25 + 878 + 271 + 349 = $1,473 Mil.
Accounts Receivable was $2,721 Mil.
Revenue was 4469 + 5033 + 4795 + 4941 = $19,238 Mil.
Gross Profit was 1394 + 1616 + 1542 + 1585 = $6,137 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 $3,758 Mil.
Total Current Liabilities was $5,731 Mil.
Long-Term Debt was $6,265 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)
=(2144 / 17857) / (2721 / 19238)
=0.12006496 / 0.14143882
=0.8489

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)
=(6137 / 19238) / (5149 / 17857)
=0.31900405 / 0.28834631
=1.1063

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 - (6808 + 1489) / 24857) / (1 - (8358 + 1583) / 26657)
=0.66621073 / 0.62707732
=1.0624

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
=17857 / 19238
=0.9282

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))
=(1377 / (1377 + 1583)) / (1184 / (1184 + 1489))
=0.4652027 / 0.442948
=1.0502

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)
=(3526 / 17857) / (3758 / 19238)
=0.19745758 / 0.19534255
=1.0108

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)
=((5359 + 6146) / 24857) / ((6265 + 5731) / 26657)
=0.46284749 / 0.45001313
=1.0285

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
=(283 - -729 - 1473) / 24857
=-0.0185

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 -2.69 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 1.06641.21650.7370.98261.07180.87970.98371.04791.14580.9469
GMI 1.01761.08320.96610.98041.20431.01741.0491.04060.97031.096
AQI 0.95511.08061.00430.9461.24741.03140.9830.97320.97241.0823
SGI 1.01241.03211.07330.86211.42521.04590.98960.95730.91160.9235
DEPI 1.16971.03770.92930.91410.82030.9030.96040.95550.86531.0451
SGAI 0.96331.04230.97971.06380.77520.93590.96361.00781.00441.0174
LVGI 0.9990.98071.16380.97320.84191.00230.9950.97441.03311.0467
TATA 0.0257-0.02940.0184-0.042-0.02740.0071-0.0177-0.0281-0.0208-0.0237
M-score -2.27-2.31-2.64-2.86-1.89-2.50-2.56-2.59-2.58-2.64

Xerox Corp Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.03081.01651.02461.09651.07131.03961.0130.8770.94690.8489
GMI 1.0211.00860.99380.98821.01291.0241.03791.12271.0961.1063
AQI 0.97320.97970.99970.99430.97240.98240.98041.01431.08231.0624
SGI 0.97320.96640.94310.92330.9750.9810.98580.98420.92350.9282
DEPI 0.95550.95650.96110.94180.86530.88090.92370.94081.04511.0502
SGAI 1.00780.9981.00541.0120.95250.96150.96320.961.01741.0108
LVGI 0.97440.980.97781.04141.03311.03961.0671.09131.04671.0285
TATA -0.0242-0.0368-0.027-0.0143-0.0171-0.0137-0.0204-0.021-0.0215-0.0185
M-score -2.59-2.67-2.64-2.56-2.54-2.54-2.59-2.66-2.63-2.69
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