GURUFOCUS.COM » STOCK LIST » Industrials » Industrial Products » ITT Inc (NYSE:ITT) » Definitions » Beneish M-Score

ITT (ITT) Beneish M-Score

: -2.58 (As of Today)
View and export this data going back to 1995. Start your Free Trial

The zones of discrimination for M-Score is as such:

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.

Good Sign:

Beneish M-Score -2.58 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

The historical rank and industry rank for ITT's Beneish M-Score or its related term are showing as below:

ITT' s Beneish M-Score Range Over the Past 10 Years
Min: -2.72   Med: -2.53   Max: -2.16
Current: -2.58

During the past 13 years, the highest Beneish M-Score of ITT was -2.16. The lowest was -2.72. And the median was -2.53.


ITT Beneish M-Score Historical Data

The historical data trend for ITT'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.

* Premium members only.

Array ( [0] => - [1] => - [2] => - [3] => - [4] => - [5] => -2.51 [6] => -2.72 [7] => -2.26 [8] => -2.27 [9] => -2.58 )
ITT Annual Data
Trend Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
Beneish M-Score
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -2.51 -2.72 -2.26 -2.27 -2.58

ITT Quarterly Data
Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23
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 -2.27 -2.25 -2.32 -2.52 -2.58

Competitive Comparison

For the Specialty Industrial Machinery subindustry, ITT'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.


ITT Beneish M-Score Distribution

For the Industrial Products industry and Industrials sector, ITT's Beneish M-Score distribution charts can be found below:

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



ITT 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 ITT 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 * 0.9738+0.528 * 0.9153+0.404 * 1.0211+0.892 * 1.0988+0.115 * 1.0524
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1594+4.679 * -0.03232-0.327 * 0.8566
=-2.58

* 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 (Dec23) TTM:Last Year (Dec22) TTM:
Total Receivables was $701 Mil.
Revenue was 829.1 + 822.1 + 833.9 + 797.9 = $3,283 Mil.
Gross Profit was 286 + 279.4 + 280 + 261.9 = $1,107 Mil.
Total Current Assets was $1,858 Mil.
Total Assets was $3,933 Mil.
Property, Plant and Equipment(Net PPE) was $648 Mil.
Depreciation, Depletion and Amortization(DDA) was $109 Mil.
Selling, General, & Admin. Expense(SGA) was $477 Mil.
Total Current Liabilities was $1,038 Mil.
Long-Term Debt & Capital Lease Obligation was $78 Mil.
Net Income was 91.5 + 110.8 + 108.2 + 100 = $411 Mil.
Non Operating Income was -0.1 + 0 + 0 + 0 = $-0 Mil.
Cash Flow from Operations was 170.3 + 169.8 + 139.6 + 58 = $538 Mil.
Total Receivables was $655 Mil.
Revenue was 774.6 + 753.6 + 733.3 + 726.2 = $2,988 Mil.
Gross Profit was 248.3 + 233.4 + 222.2 + 218.4 = $922 Mil.
Total Current Assets was $1,837 Mil.
Total Assets was $3,780 Mil.
Property, Plant and Equipment(Net PPE) was $601 Mil.
Depreciation, Depletion and Amortization(DDA) was $107 Mil.
Selling, General, & Admin. Expense(SGA) was $374 Mil.
Total Current Liabilities was $1,186 Mil.
Long-Term Debt & Capital Lease Obligation was $67 Mil.




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)
=(701 / 3283) / (655.1 / 2987.7)
=0.213524 / 0.219266
=0.9738

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)
=(922.3 / 2987.7) / (1107.3 / 3283)
=0.308699 / 0.337283
=0.9153

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 - (1857.7 + 648.4) / 3932.6) / (1 - (1836.8 + 600.6) / 3780.3)
=0.362737 / 0.355236
=1.0211

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
=3283 / 2987.7
=1.0988

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))
=(107.4 / (107.4 + 600.6)) / (109.2 / (109.2 + 648.4))
=0.151695 / 0.144139
=1.0524

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)
=(476.6 / 3283) / (374.1 / 2987.7)
=0.145172 / 0.125213
=1.1594

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)
=((78 + 1037.8) / 3932.6) / ((66.6 + 1185.5) / 3780.3)
=0.283731 / 0.331217
=0.8566

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
=(410.5 - -0.1 - 537.7) / 3932.6
=-0.03232

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.

ITT has a M-score of -2.58 suggests that the company is unlikely to be a manipulator.


ITT (ITT) Business Description

Traded in Other Exchanges
Address
100 Washington Boulevard, 6th Floor, Stamford, CT, USA, 06902
ITT is a diversified industrial conglomerate with over $3 billion in sales. After the spinoffs of Xylem and Exelis in 2011, the company's products primarily include brake pads, shock absorbers, pumps, valves, connectors, and switches. Its customers include original-equipment and Tier 1 manufacturers as well as aftermarket customers. ITT uses a network of approximately 700 independent distributors, which accounts for about one third of overall revenue. Nearly three fourths of the company's sales are made in North America and Europe. ITT's primary end markets include automotive, rail, oil and gas, aerospace and defense, chemical, mining, and general industrial.
Executives
Ryan F. Flynn officer: See Remarks 56 TECHNOLOGY DR., IRVINE CA 92618
Don Defosset director C/O TEREX CORPORATION, 200 NYALA FARM ROAD, WESTPORT CT 06880
Nazzic S Keene director 1710 SAIC DRIVE, MCLEAN VA 22102
Kevin C Berryman director 521 WEST 57TH STREET, NEW YORK NY 10019
Maurine C. Lembesis officer: See Remarks 8 RYANS RUN, PLEASANT VALLEY NY 12569
Carlo Ghirardo officer: See Remarks VIA BONINO, 5, BRA (CN) L6 12042
Fernando Roland officer: SVP & Pres Industrial Process 100 WASHINGTON BLVD., 6TH FLOOR, STAMFORD CT 06902
Lori B. Marino officer: SVP, General Counsel 100 WASHINGTON BLVD, STAMFORD CT 06902
De Mesa Graziano Cheryl officer: VP, Chief Accounting Officer 80 GRASSLANDS ROAD, ELMSFORD NY 10523
Emmanuel Caprais officer: Chief Financial Officer 1133 WESTCHESTER AVENUE, WHITE PLAINS NY 10604
Mary Elizabeth Gustafsson officer: See Remarks ITT CORPORATION, 1133 WESTCHESTER AVENUE, WHITE PLAINS NY 10604
Timothy H Powers director C/O RICHARD W DAVLES HUBBELL INC, 684 DERBY MILFORD RD, ORANGE CT 06477
Luca Savi officer: See Remarks C/O ITT CORPORATION, 1133 WESTCHESTER AVENUE, WHITE PLAINS NY 10604
Bartek Markowiecki officer: SVP, Strategy & Corp Dev. C/O ITT INC., 1133 WESTCHESTER AVENUE, WHITE PLAINS NY 10604
Orlando D Ashford director C/O AMERANT BANK, 220 ALHAMBRA CR., CORAL GABLES FL 33134