Reynolds American Beneish M-Score Historical Data
The historical data trend for Reynolds American'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.
Reynolds American Beneish M-Score Chart
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Reynolds American Annual Data
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Trend |
Dec07 |
Dec08 |
Dec09 |
Dec10 |
Dec11 |
Dec12 |
Dec13 |
Dec14 |
Dec15 |
Dec16 |
| Beneish M-Score |
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-2.74 |
-2.11 |
-2.46 |
-2.34 |
-1.95 |
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Reynolds American Quarterly Data
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Jun12 |
Sep12 |
Dec12 |
Mar13 |
Jun13 |
Sep13 |
Dec13 |
Mar14 |
Jun14 |
Sep14 |
Dec14 |
Mar15 |
Jun15 |
Sep15 |
Dec15 |
Mar16 |
Jun16 |
Sep16 |
Dec16 |
Mar17 |
| Beneish M-Score |
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-1.87 |
-1.97 |
-2.25 |
-1.95 |
-2.59 |
Competitive Comparison of Reynolds American's Beneish M-Score
For the Tobacco subindustry, Reynolds American'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.
Reynolds American's Beneish M-Score Distribution in the Tobacco Products Industry
For the Tobacco Products industry and Consumer Defensive sector, Reynolds American's Beneish M-Score distribution charts can be found below:
* The bar in red indicates where Reynolds American's Beneish M-Score falls into.
Reynolds American 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 Reynolds American 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 * 0.6983 | + | 0.528 * 0.9267 | + | 0.404 * 1.0446 | + | 0.892 * 1.0867 | + | 0.115 * 1.054 |
| - | 0.172 * SGAI | + | 4.679 * TATA | - | 0.327 * LVGI |
| - | 0.172 * 0.8449 | + | 4.679 * 0.024866 | - | 0.327 * 0.9327 |
| = | -2.53 |
* 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.
| This Year (Mar17) TTM: | Last Year (Mar16) TTM: |
Total Receivables was $107 Mil.
Revenue was 2949 + 3186 + 3205 + 3195 = $12,535 Mil.
Gross Profit was 1750 + 1974 + 2016 + 1920 = $7,660 Mil.
Total Current Assets was $5,103 Mil.
Total Assets was $51,959 Mil.
Property, Plant and Equipment(Net PPE) was $1,355 Mil.
Depreciation, Depletion and Amortization(DDA) was $125 Mil.
Selling, General, & Admin. Expense(SGA) was $1,884 Mil.
Total Current Liabilities was $5,891 Mil.
Long-Term Debt & Capital Lease Obligation was $12,651 Mil.
Net Income was 780 + 851 + 861 + 796 = $3,288 Mil.
Non Operating Income was -4 + 1 + -10 + 1 = $-12 Mil.
Cash Flow from Operations was 1861 + 823 + 1182 + -1858 = $2,008 Mil.
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Total Receivables was $141 Mil.
Revenue was 2917 + 3054 + 3161 + 2403 = $11,535 Mil.
Gross Profit was 1752 + 1704 + 1757 + 1319 = $6,532 Mil.
Total Current Assets was $7,529 Mil.
Total Assets was $54,408 Mil.
Property, Plant and Equipment(Net PPE) was $1,269 Mil.
Depreciation, Depletion and Amortization(DDA) was $124 Mil.
Selling, General, & Admin. Expense(SGA) was $2,052 Mil.
Total Current Liabilities was $7,604 Mil.
Long-Term Debt & Capital Lease Obligation was $13,213 Mil.
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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) |
| = | (107 / 12535) | / | (141 / 11535) |
| = | 0.008536 | / | 0.012224 |
| | = | 0.6983 |
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) |
| = | (6532 / 11535) | / | (7660 / 12535) |
| = | 0.566277 | / | 0.611089 |
| | = | 0.9267 |
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 - (5103 + 1355) / 51959) | / | (1 - (7529 + 1269) / 54408) |
| = | 0.87571 | / | 0.838296 |
| | = | 1.0446 |
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 |
| = | 12535 | / | 11535 |
| | = | 1.0867 |
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)) |
| = | (124 / (124 + 1269)) | / | (125 / (125 + 1355)) |
| = | 0.089017 | / | 0.084459 |
| | = | 1.054 |
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) |
| = | (1884 / 12535) | / | (2052 / 11535) |
| = | 0.150299 | / | 0.177893 |
| | = | 0.8449 |
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) |
| = | ((12651 + 5891) / 51959) | / | ((13213 + 7604) / 54408) |
| = | 0.356858 | / | 0.382609 |
| | = | 0.9327 |
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 |
| = | (3288 - -12 | - | 2008) | / | 51959 |
| | = | 0.024866 |
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.
Reynolds American has a M-score of -2.53 suggests that the company is unlikely to be a manipulator.
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