Flowserve (BSP:F1LS34) Beneish M-Score : -2.48 (As of Dec. 13, 2024)

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What is Flowserve Beneish M-Score?

The zones of discrimination for M-Score is as such:

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator.
An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

Good Sign:

Beneish M-Score -2.48 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

The historical rank and industry rank for Flowserve's Beneish M-Score or its related term are showing as below:

BSP:F1LS34' s Beneish M-Score Range Over the Past 10 Years
Min: -2.92 Med: -2.61 Max: -2.07
Current: -2.48

During the past 13 years, the highest Beneish M-Score of Flowserve was -2.07. The lowest was -2.92. And the median was -2.61.

Flowserve Beneish M-Score Historical Data

The historical data trend for Flowserve's Beneish M-Score can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

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Flowserve Beneish M-Score Chart

Flowserve Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Beneish M-Score

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-2.50

-2.69

-2.55

-2.07

-2.54

Flowserve Quarterly Data
	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24	Jun24	Sep24
Beneish M-Score	Get a 7-Day Free Trial															-2.31	-2.54	-2.51	-2.37	-2.48

Competitive Comparison of Flowserve's Beneish M-Score

For the Specialty Industrial Machinery subindustry, Flowserve's Beneish M-Score, along with its competitors' market caps and Beneish M-Score data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Flowserve's Beneish M-Score Distribution in the Industrial Products Industry

For the Industrial Products industry and Industrials sector, Flowserve's Beneish M-Score distribution charts can be found below:

* The bar in red indicates where Flowserve's Beneish M-Score falls into.

Flowserve Beneish M-Score Calculation

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Altman Z-Score) or business trend (Piotroski 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 Flowserve for today is based on a combination of the following eight different indices:

-4.84

0.92 * DSRI

0.528 * GMI

0.404 * AQI

0.892 * SGI

0.115 * DEPI

-4.84

0.92 * 1.1478

0.528 * 0.9509

0.404 * 0.9719

0.892 * 1.1143

0.115 * 1.1266

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 0.9665

4.679 * -0.022149

0.327 * 0.9619

-2.35

This Year (Sep24) TTM:

Last Year (Sep23) TTM:

Total Receivables was R$7,037 Mil.
Revenue was 6274.809 + 6231.136 + 5415.428 + 5709.139 = R$23,631 Mil.
Gross Profit was 1977.366 + 1971.83 + 1687.993 + 1663.693 = R$7,301 Mil.
Total Current Assets was R$15,892 Mil.
Total Assets was R$29,209 Mil.
Property, Plant and Equipment(Net PPE) was R$3,726 Mil.
Depreciation, Depletion and Amortization(DDA) was R$436 Mil.
Selling, General, & Admin. Expense(SGA) was R$5,007 Mil.
Total Current Liabilities was R$7,976 Mil.
Long-Term Debt & Capital Lease Obligation was R$7,371 Mil.
Net Income was 323.308 + 391.117 + 369.601 + 306.811 = R$1,391 Mil.
Non Operating Income was -4.264 + -61.552 + 8.242 + -87.873 = R$-145 Mil.
Cash Flow from Operations was 988.414 + -68.845 + 310.027 + 953.658 = R$2,183 Mil.

Total Receivables was R$5,502 Mil.
Revenue was 5406.484 + 5243.821 + 5106.017 + 5449.756 = R$21,206 Mil.
Gross Profit was 1568.995 + 1566.58 + 1546.069 + 1548.662 = R$6,230 Mil.
Total Current Assets was R$13,031 Mil.
Total Assets was R$24,522 Mil.
Property, Plant and Equipment(Net PPE) was R$3,206 Mil.
Depreciation, Depletion and Amortization(DDA) was R$429 Mil.
Selling, General, & Admin. Expense(SGA) was R$4,649 Mil.
Total Current Liabilities was R$6,454 Mil.
Long-Term Debt & Capital Lease Obligation was R$6,941 Mil.

1. DSRI = Days Sales in Receivables Index

Measured as the ratio of Revenue in Total 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)
	=	(7036.783 / 23630.512)	/	(5501.653 / 21206.078)
	=	0.297784	/	0.259438
	=	1.1478

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)
	=	(6230.306 / 21206.078)	/	(7300.882 / 23630.512)
	=	0.293798	/	0.30896
	=	0.9509

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 Property, Plant and Equipment to Total Assets.

AQI	=	(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)	/	(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
	=	(1 - (15892.306 + 3725.97) / 29209.447)	/	(1 - (13030.883 + 3205.745) / 24521.697)
	=	0.328359	/	0.337867
	=	0.9719

4. SGI = Sales Growth Index

Ratio of Revenue 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
	=	23630.512	/	21206.078
	=	1.1143

5. DEPI = Depreciation Index

Measured as the ratio of the rate of Depreciation, Depletion and Amortization 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))
	=	(429.344 / (429.344 + 3205.745))	/	(436.362 / (436.362 + 3725.97))
	=	0.118111	/	0.104836
	=	1.1266

Note: If the Depreciation, Depletion and Amortization data is not available, we assume that the depreciation rate is constant and set the Depreciation Index to 1.

6. SGAI = Sales, General and Administrative expenses Index

The ratio of Selling, General, & Admin. Expense(SGA) to Sales 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)
	=	(5007.378 / 23630.512)	/	(4649.368 / 21206.078)
	=	0.211903	/	0.219247
	=	0.9665

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 in leverage

LVGI	=	((LTD_t + CurrentLiabilities_t) / TotalAssets_t)	/	((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
	=	((7370.74 + 7976.459) / 29209.447)	/	((6940.503 + 6453.967) / 24521.697)
	=	0.525419	/	0.546229
	=	0.9619

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
	=	(1390.837 - -145.447	-	2183.254)	/	29209.447
	=	-0.022149

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator. An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

Flowserve has a M-score of -2.35 suggests that the company is unlikely to be a manipulator.

Flowserve Beneish M-Score Related Terms

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Flowserve Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Industrial Products » Flowserve Corp (BSP:F1LS34) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

FLS:USA 0IQE:UK FWV:Germany FWV:Germany

Address

5215 North O’Connor Boulevard, Suite 700, Irving, TX, USA, 75039

Website

https://www.flowserve.com

Flowserve Corp is a manufacturer and aftermarket service provider of comprehensive flow control systems. It develops precision-engineered flow control equipment to monitor movement and protect customers' materials and processes. It offers an extensive range of pumps, valves, seals, and services for several industries, including oil and gas, chemical, power generation, and water management. In addition, Flowserve has a network of Quick Response Centers to provide aftermarket equipment services. The aftermarket services help customers with installation, diagnostics, repair, and retrofitting. Sales are roughly split across many regions, with North America and Europe contributing the majority of total revenue.

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