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Berkshire Hathaway Beneish M-Score

: -3.59 (As of Today)
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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.

Berkshire Hathaway has a M-score of -3.59 suggests that the company is not a manipulator.

NYSE:BRK.A' s Beneish M-Score Range Over the Past 10 Years
Min: -4.97   Max: 0.07
Current: -3.59

-4.97
0.07

During the past 13 years, the highest Beneish M-Score of Berkshire Hathaway was 0.07. The lowest was -4.97. And the median was -3.59.


Berkshire Hathaway Beneish M-Score Historical Data

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

* Premium members only.

Berkshire Hathaway Annual Data
Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18
Beneish M-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -3.78 -3.79 -3.67 -3.64 -3.83

Berkshire Hathaway Quarterly Data
Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19
Beneish M-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -3.58 -3.43 -3.83 -3.60 -3.59

Competitive Comparison
* 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.


Berkshire Hathaway Beneish M-Score Distribution

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



Berkshire Hathaway 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 Berkshire Hathaway 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 * 0.9625+0.528 * 1+0.404 * 1.0012+0.892 * 1.0946+0.115 * 0.9909
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8781+4.679 * -0.254-0.327 * 0.969
=-3.59

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

This Year (Jun19) TTM:Last Year (Jun18) TTM:
Accounts Receivable was USD 29,717 Mil.
Revenue was 73646 + 81000 + 28206 + 78156 = USD 261,008 Mil.
Gross Profit was 73646 + 81000 + 28206 + 78156 = USD 261,008 Mil.
Total Current Assets was USD 156,320 Mil.
Total Assets was USD 760,108 Mil.
Property, Plant and Equipment(Net PPE) was USD 169,460 Mil.
Depreciation, Depletion and Amortization(DDA) was USD 9,878 Mil.
Selling, General, & Admin. Expense(SGA) was USD 18,340 Mil.
Total Current Liabilities was USD 44,849 Mil.
Long-Term Debt & Capital Lease Obligation was USD 95,646 Mil.
Net Income was 14073 + 21661 + -25392 + 18540 = USD 28,882 Mil.
Non Operating Income was 46440 + 44242 + 46056 + 47124 = USD 183,862 Mil.
Cash Flow from Operations was 9185 + 7577 + 10845 + 10464 = USD 38,071 Mil.
Accounts Receivable was USD 28,206 Mil.
Revenue was 68562 + 50458 + 58963 + 60472 = USD 238,455 Mil.
Gross Profit was 68562 + 50458 + 58963 + 60472 = USD 238,455 Mil.
Total Current Assets was USD 142,379 Mil.
Total Assets was USD 711,932 Mil.
Property, Plant and Equipment(Net PPE) was USD 163,229 Mil.
(DDA) was USD 9,423 Mil.
Selling, General, & Admin. Expense(SGA) was USD 19,082 Mil.
Total Current Liabilities was USD 44,251 Mil.
Long-Term Debt & Capital Lease Obligation was USD 91,554 Mil.




1. DSRI = Days Sales in Receivables Index

Measured as the ratio of Revenue in Accounts Receivable 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)
=(29717 / 261008) / (28206 / 238455)
=0.11385475 / 0.11828647
=0.9625

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)
=(238455 / 238455) / (261008 / 261008)
=1 / 1
=1

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 - (156320 + 169460) / 760108) / (1 - (142379 + 163229) / 711932)
=0.57140301 / 0.57073428
=1.0012

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
=261008 / 238455
=1.0946

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))
=(9423 / (9423 + 163229)) / (9878 / (9878 + 169460))
=0.054578 / 0.05508035
=0.9909

6. SGAI = Sales, General and Administrative expenses Index

The ratio of c 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)
=(18340 / 261008) / (19082 / 238455)
=0.07026605 / 0.08002348
=0.8781

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)
=((95646 + 44849) / 760108) / ((91554 + 44251) / 711932)
=0.18483558 / 0.19075558
=0.969

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
=(28882 - 183862 - 38071) / 760108
=-0.254

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.

Berkshire Hathaway has a M-score of -3.59 suggests that the company will not be a manipulator.

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