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GuruFocus has detected 4 Warning Signs with Dun & Bradstreet Corp $DNB.
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Dun & Bradstreet Corp (NYSE:DNB)
Beneish M-Score
-2.71 (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.

Dun & Bradstreet Corp has a M-score of -2.71 suggests that the company is not a manipulator.

DNB' s Beneish M-Score Range Over the Past 10 Years
Min: -3.02   Max: -1.86
Current: -2.71

-3.02
-1.86

During the past 13 years, the highest Beneish M-Score of Dun & Bradstreet Corp was -1.86. The lowest was -3.02. And the median was -2.69.


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 Dun & Bradstreet 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 * 0.9698+0.528 * 0.9898+0.404 * 1.0265+0.892 * 1.0328+0.115 * 1.0741
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.016+4.679 * -0.0554-0.327 * 0.9536
=-2.71

* 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 $438 Mil.
Revenue was 381.5 + 517.1 + 412.8 + 398.8 = $1,710 Mil.
Gross Profit was 239.5 + 370.6 + 282.1 + 265.8 = $1,158 Mil.
Total Current Assets was $861 Mil.
Total Assets was $2,279 Mil.
Property, Plant and Equipment(Net PPE) was $43 Mil.
Depreciation, Depletion and Amortization(DDA) was $71 Mil.
Selling, General & Admin. Expense(SGA) was $719 Mil.
Total Current Liabilities was $1,001 Mil.
Long-Term Debt was $1,682 Mil.
Net Income was 15.5 + 78 + -29.4 + 18.8 = $83 Mil.
Non Operating Income was -1.8 + -12.4 + -92.2 + -0.5 = $-107 Mil.
Cash Flow from Operations was 123.8 + 42.7 + 99.1 + 50.4 = $316 Mil.
Accounts Receivable was $437 Mil.
Revenue was 375 + 499.3 + 406.2 + 375.4 = $1,656 Mil.
Gross Profit was 242.6 + 354.4 + 273.8 + 239 = $1,110 Mil.
Total Current Assets was $866 Mil.
Total Assets was $2,176 Mil.
Property, Plant and Equipment(Net PPE) was $31 Mil.
Depreciation, Depletion and Amortization(DDA) was $63 Mil.
Selling, General & Admin. Expense(SGA) was $685 Mil.
Total Current Liabilities was $960 Mil.
Long-Term Debt was $1,725 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)
=(438.1 / 1710.2) / (437.4 / 1655.9)
=0.25616887 / 0.26414639
=0.9698

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)
=(1109.8 / 1655.9) / (1158 / 1710.2)
=0.67020955 / 0.67711379
=0.9898

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 - (860.9 + 42.9) / 2279.3) / (1 - (865.8 + 30.9) / 2176)
=0.60347475 / 0.5879136
=1.0265

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
=1710.2 / 1655.9
=1.0328

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))
=(62.7 / (62.7 + 30.9)) / (71.1 / (71.1 + 42.9))
=0.66987179 / 0.62368421
=1.0741

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)
=(718.6 / 1710.2) / (684.8 / 1655.9)
=0.42018477 / 0.41355154
=1.016

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)
=((1682.2 + 1000.5) / 2279.3) / ((1725.4 + 960.2) / 2176)
=1.17698416 / 1.23419118
=0.9536

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
=(82.9 - -106.9 - 316) / 2279.3
=-0.0554

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.

Dun & Bradstreet Corp has a M-score of -2.71 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.

Dun & Bradstreet Corp Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.03680.95211.02841.09340.95951.07161.07580.94121.02110.9978
GMI 0.95991.01851.29450.83521.00180.971.0350.99560.99870.9791
AQI 1.09860.98351.01391.16630.97610.9920.90010.95481.08710.9824
SGI 1.03571.08850.97720.99381.04880.94570.93711.03071.01921.0407
DEPI 0.82430.86671.06680.92570.87850.97121.09030.85711.03121.0758
SGAI 1.04430.94130.95620.98410.97850.98970.94561.06641.11141.0286
LVGI 1.06011.15980.91060.96940.96111.1221.15141.00910.96190.9695
TATA -0.0708-0.0826-0.0348-0.0469-0.0159-0.0237-0.03940.0156-0.0736-0.0548
M-score -2.77-2.89-2.43-2.63-2.55-2.63-2.70-2.49-2.76-2.71

Dun & Bradstreet Corp Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 0.94121.0010.93440.90271.02110.91111.03160.96410.99780.9698
GMI 0.99561.00461.01350.98560.99870.98370.96520.97420.97910.9898
AQI 0.95480.99871.11321.15061.08711.07910.94930.97050.98241.0265
SGI 1.03071.01361.03051.05431.01921.04771.05761.05161.04071.0328
DEPI 0.85710.92130.82410.80751.03120.961.03751.05481.07581.0741
SGAI 1.06641.06221.08051.09061.11141.12911.13581.09081.02861.016
LVGI 1.00910.96410.95320.93040.96190.97180.96260.98660.96950.9536
TATA 0.0156-0.0188-0.0442-0.0509-0.0736-0.0676-0.0522-0.0719-0.0548-0.0554
M-score -2.49-2.56-2.69-2.72-2.76-2.83-2.69-2.83-2.71-2.71
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