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GuruFocus has detected 1 Warning Sign with Fluor Corp $FLR.
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Fluor Corp (NYSE:FLR)
Beneish M-Score
-2.40 (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.

Fluor Corp has a M-score of -2.40 suggests that the company is not a manipulator.

FLR' s Beneish M-Score Range Over the Past 10 Years
Min: -3.22   Max: -1.66
Current: -2.4

-3.22
-1.66

During the past 13 years, the highest Beneish M-Score of Fluor Corp was -1.66. The lowest was -3.22. And the median was -2.49.


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 Fluor 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 * 0.9844+0.528 * 1.6632+0.404 * 0.9939+0.892 * 1.0811+0.115 * 0.8181
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9183+4.679 * -0.0681-0.327 * 0.9904
=-2.40

* 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 $1,593 Mil.
Revenue was 4835.905 + 4989.655 + 4766.864 + 4856.117 = $19,449 Mil.
Gross Profit was 150.001 + 249.018 + 37.227 + 248.249 = $684 Mil.
Total Current Assets was $5,560 Mil.
Total Assets was $9,160 Mil.
Property, Plant and Equipment(Net PPE) was $1,037 Mil.
Depreciation, Depletion and Amortization(DDA) was $234 Mil.
Selling, General & Admin. Expense(SGA) was $181 Mil.
Total Current Liabilities was $3,676 Mil.
Long-Term Debt was $1,526 Mil.
Net Income was 60.611 + 70.461 + 4.804 + 101.813 = $238 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 270.235 + 253.435 + 361.94 + -24.111 = $861 Mil.
Accounts Receivable was $1,497 Mil.
Revenue was 4423.889 + 4370.681 + 4384.612 + 4810.106 = $17,989 Mil.
Gross Profit was 255.822 + 252.462 + 250.793 + 293.981 = $1,053 Mil.
Total Current Assets was $5,403 Mil.
Total Assets was $9,002 Mil.
Property, Plant and Equipment(Net PPE) was $1,065 Mil.
Depreciation, Depletion and Amortization(DDA) was $189 Mil.
Selling, General & Admin. Expense(SGA) was $182 Mil.
Total Current Liabilities was $3,590 Mil.
Long-Term Debt was $1,572 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)
=(1592.986 / 19448.541) / (1496.829 / 17989.288)
=0.08190774 / 0.08320668
=0.9844

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)
=(1053.058 / 17989.288) / (684.495 / 19448.541)
=0.05853806 / 0.03519519
=1.6632

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 - (5560.338 + 1037.461) / 9160.335) / (1 - (5402.869 + 1065.264) / 9001.727)
=0.27974261 / 0.28145644
=0.9939

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
=19448.541 / 17989.288
=1.0811

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))
=(189.081 / (189.081 + 1065.264)) / (234.321 / (234.321 + 1037.461))
=0.15074082 / 0.1842462
=0.8181

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)
=(181.008 / 19448.541) / (182.332 / 17989.288)
=0.00930702 / 0.01013559
=0.9183

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)
=((1526.023 + 3676.369) / 9160.335) / ((1572.001 + 3589.93) / 9001.727)
=0.56792595 / 0.57343785
=0.9904

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
=(237.689 - 0 - 861.499) / 9160.335
=-0.0681

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.

Fluor Corp has a M-score of -2.40 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.

Fluor Corp Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.88280.96930.81821.29580.90570.85381.03371.46740.97171.3448
GMI 0.82220.88730.91571.74920.68841.53120.6430.76821.07521.4557
AQI 0.93220.90511.14230.91671.14020.83751.09331.0931.20121.316
SGI 1.18561.33760.9850.94811.12141.17940.99180.78720.84131.0509
DEPI 0.97790.92980.94770.99221.00320.98481.03471.07420.93650.9649
SGAI 0.91440.88380.79090.92330.93270.78331.16941.32521.09511.0801
LVGI 0.93330.99720.93391.00571.13181.01180.88071.12480.9751.1253
TATA -0.0641-0.0482-0.0307-0.0254-0.0358-0.0178-0.0146-0.0161-0.0347-0.0461
M-score -2.81-2.52-2.74-2.00-2.77-2.29-2.66-2.49-2.70-2.02

Fluor Corp Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 1.46741.38161.05381.20990.97171.37071.48711.45751.34480.9844
GMI 0.76820.78160.86760.97971.07521.14251.17821.45451.45571.6632
AQI 1.0930.9431.09811.07491.20121.68321.48811.43491.3160.9939
SGI 0.78720.810.85780.85830.84130.86920.89050.95931.05091.0811
DEPI 1.07421.04390.98610.96070.93651.09951.03080.98860.96490.8181
SGAI 1.32521.27381.00671.0631.09511.12751.18681.05421.08010.9183
LVGI 1.12481.0981.02011.07430.9751.14621.16691.14941.12530.9904
TATA -0.01610.00140.0206-0.0257-0.0347-0.0422-0.0257-0.0356-0.0461-0.0681
M-score -2.49-2.50-2.50-2.55-2.70-2.16-2.04-1.91-2.02-2.40
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