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GuruFocus has detected 3 Warning Signs with NTT DOCOMO Inc $DCM.
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NTT DOCOMO Inc (NYSE:DCM)
Beneish M-Score
-2.87 (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.

NTT DOCOMO Inc has a M-score of -2.89 suggests that the company is not a manipulator.

DCM' s Beneish M-Score Range Over the Past 10 Years
Min: -6.89   Max: -2.71
Current: -2.87

-6.89
-2.71

During the past 13 years, the highest Beneish M-Score of NTT DOCOMO Inc was -2.71. The lowest was -6.89. And the median was -2.96.


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 NTT DOCOMO Inc 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 * 0.924+0.528 * 0.9835+0.404 * 0.916+0.892 * 1.1124+0.115 * 1.2534
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0527+4.679 * -0.0925-0.327 * 0.9646
=-2.89

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Mar17) TTM:Last Year (Mar16) TTM:
Accounts Receivable was $2,118 Mil.
Revenue was 9874.19022021 + 10183.3564515 + 11589.9406883 + 10523.593059 = $42,171 Mil.
Gross Profit was 4863.51418969 + 5308.65591764 + 6315.03090359 + 6162.39633454 = $22,650 Mil.
Total Current Assets was $25,118 Mil.
Total Assets was $66,005 Mil.
Property, Plant and Equipment(Net PPE) was $22,502 Mil.
Depreciation, Depletion and Amortization(DDA) was $4,156 Mil.
Selling, General & Admin. Expense(SGA) was $9,611 Mil.
Total Current Liabilities was $11,292 Mil.
Long-Term Debt was $1,417 Mil.
Net Income was 558.926286238 + 1586.39667374 + 1950.72324514 + 1963.47634429 = $6,060 Mil.
Non Operating Income was 6.47381029345 + 70.0959757099 + -4.45058815554 + -37.1520319238 = $35 Mil.
Cash Flow from Operations was 3432.27074874 + 2182.25988184 + 4204.24368002 + 2314.11407022 = $12,133 Mil.
Accounts Receivable was $2,061 Mil.
Revenue was 10126.6871923 + 9606.38796399 + 9472.70690384 + 8704.13987872 = $37,910 Mil.
Gross Profit was 4743.45998511 + 5100.25897151 + 5231.67337508 + 4950.1772571 = $20,026 Mil.
Total Current Assets was $22,847 Mil.
Total Assets was $63,880 Mil.
Property, Plant and Equipment(Net PPE) was $21,609 Mil.
Depreciation, Depletion and Amortization(DDA) was $5,248 Mil.
Selling, General & Admin. Expense(SGA) was $8,207 Mil.
Total Current Liabilities was $10,801 Mil.
Long-Term Debt was $1,950 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)
=(2117.82157612 / 42171.080419) / (2060.51976549 / 37909.9219389)
=0.05021976 / 0.05435305
=0.924

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)
=(20025.5695888 / 37909.9219389) / (22649.5973455 / 42171.080419)
=0.52824086 / 0.53708838
=0.9835

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 - (25118.3130898 + 22502.4243578) / 66005.1808195) / (1 - (22847.3758918 + 21609.3089894) / 63880.3276671)
=0.27853031 / 0.30406298
=0.916

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
=42171.080419 / 37909.9219389
=1.1124

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))
=(5248.24458677 / (5248.24458677 + 21609.3089894)) / (4156.3052087 / (4156.3052087 + 22502.4243578))
=0.19541037 / 0.15590785
=1.2534

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)
=(9611.25097115 / 42171.080419) / (8207.2755247 / 37909.9219389)
=0.22791095 / 0.21649413
=1.0527

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)
=((1417.33050528 + 11292.0255233) / 66005.1808195) / ((1949.85110469 + 10801.387033) / 63880.3276671)
=0.19255089 / 0.19961135
=0.9646

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
=(6059.52254941 - 34.9671659241 - 12132.8883808) / 66005.1808195
=-0.0925

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.

NTT DOCOMO Inc has a M-score of -2.89 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.

NTT DOCOMO Inc Annual Data

Mar08Mar09Mar10Mar11Mar12Mar13Mar14Mar15Mar16Mar17
DSRI 0.89291.18931.03121.13050.98090.2291.22970.90080.99130.924
GMI 1.00320.94610.98390.99371.00851.03491.02931.08131.0280.9835
AQI 1.06761.17181.01841.00670.951.11980.97530.96230.97880.916
SGI 1.0191.0571.04931.06841.07541.00130.82890.88340.96711.1124
DEPI 1.03560.87221.0851.00070.95640.92941.061.00811.12821.2534
SGAI 0.92121.01671.07160.99450.96131.00710.93430.98190.91131.0527
LVGI 0.98511.02940.88330.84760.94650.94541.04640.98291.06880.9646
TATA -0.1574-0.1014-0.1024-0.114-0.0962-0.0645-0.0747-0.0831-0.0875-0.0925
M-score -3.25-2.72-2.85-2.78-2.88-3.41-2.76-3.03-2.91-2.89

NTT DOCOMO Inc Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 0.9270.90080.84631.06331.0650.99131.04671.03460.86550.924
GMI 1.05761.08131.08151.04861.04821.0281.00321.00631.00780.9835
AQI 0.98950.96230.94110.88530.92140.97880.98760.97030.95210.916
SGI 0.90940.88340.85990.8570.88850.96711.06321.14261.16041.1124
DEPI 0.98741.00811.02831.08811.12681.12821.18261.20581.17191.2534
SGAI 0.98520.98190.96560.96750.90570.91130.93390.93620.97311.0527
LVGI 1.11830.98291.08831.04560.941.06880.9571.0481.04390.9646
TATA -0.0988-0.0831-0.0911-0.0796-0.08-0.0875-0.0761-0.0813-0.0964-0.0925
M-score -3.10-3.03-3.17-2.94-2.85-2.91-2.69-2.69-2.92-2.89
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