Moody's (WBO:MOCO) Beneish M-Score : -2.64 (As of Apr. 28, 2024)

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What is Moody's Beneish M-Score?

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 -2.64 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

WBO:MOCO' s Beneish M-Score Range Over the Past 10 Years
Min: -2.83 Med: -2.51 Max: -1.7
Current: -2.64

During the past 13 years, the highest Beneish M-Score of Moody's was -1.70. The lowest was -2.83. And the median was -2.51.

Moody's Beneish M-Score Historical Data

The historical data trend for Moody's'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.

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Moody's Beneish M-Score Chart

Moody's Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Beneish M-Score

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-2.41

-2.59

-2.20

-2.56

-2.64

Moody's 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	Get a 7-Day Free Trial															-2.56	-2.61	-2.64	-2.63	-2.64

Competitive Comparison of Moody's's Beneish M-Score

For the Financial Data & Stock Exchanges subindustry, Moody's'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.

Moody's's Beneish M-Score Distribution in the Capital Markets Industry

For the Capital Markets industry and Financial Services sector, Moody's's Beneish M-Score distribution charts can be found below:

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

Moody's 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 Moody's for today is based on a combination of the following eight different indices:

-4.84

0.92 * DSRI

0.528 * GMI

0.404 * AQI

0.892 * SGI

0.115 * DEPI

-4.84

0.92 * 0.9232

0.528 * 0.9856

0.404 * 0.9807

0.892 * 1.0567

0.115 * 0.9416

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 0.985

4.679 * -0.034922

0.327 * 0.9499

-2.67

This Year (Dec23) TTM:

Last Year (Dec22) TTM:

Total Receivables was €1,521 Mil.
Revenue was 1357.16 + 1379.264 + 1378.962 + 1372.98 = €5,488 Mil.
Gross Profit was 971.103 + 993.22 + 985.764 + 973.228 = €3,923 Mil.
Total Current Assets was €3,981 Mil.
Total Assets was €13,408 Mil.
Property, Plant and Equipment(Net PPE) was €807 Mil.
Depreciation, Depletion and Amortization(DDA) was €346 Mil.
Selling, General, & Admin. Expense(SGA) was €1,514 Mil.
Total Current Liabilities was €2,293 Mil.
Long-Term Debt & Capital Lease Obligation was €6,701 Mil.
Net Income was 311.78 + 364.493 + 347.971 + 467.934 = €1,492 Mil.
Non Operating Income was -16.506 + -8.433 + 2.769 + -13.076 = €-35 Mil.
Cash Flow from Operations was 437.409 + 432.894 + 557.492 + 567.872 = €1,996 Mil.

Total Receivables was €1,559 Mil.
Revenue was 1217.76 + 1287.75 + 1306.426 + 1381.976 = €5,194 Mil.
Gross Profit was 830.72 + 890.82 + 934.648 + 1003.34 = €3,660 Mil.
Total Current Assets was €3,865 Mil.
Total Assets was €13,545 Mil.
Property, Plant and Equipment(Net PPE) was €801 Mil.
Depreciation, Depletion and Amortization(DDA) was €315 Mil.
Selling, General, & Admin. Expense(SGA) was €1,454 Mil.
Total Current Liabilities was €2,242 Mil.
Long-Term Debt & Capital Lease Obligation was €7,323 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)
	=	(1521.303 / 5488.366)	/	(1559.488 / 5193.912)
	=	0.277187	/	0.300253
	=	0.9232

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)
	=	(3659.528 / 5193.912)	/	(3923.315 / 5488.366)
	=	0.70458	/	0.714842
	=	0.9856

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 - (3980.697 + 806.96) / 13408.374)	/	(1 - (3864.736 + 800.512) / 13545.456)
	=	0.642935	/	0.655586
	=	0.9807

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
	=	5488.366	/	5193.912
	=	1.0567

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))
	=	(315.296 / (315.296 + 800.512))	/	(345.995 / (345.995 + 806.96))
	=	0.282572	/	0.300094
	=	0.9416

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)
	=	(1513.656 / 5488.366)	/	(1454.278 / 5193.912)
	=	0.275794	/	0.279997
	=	0.985

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)
	=	((6700.519 + 2292.5) / 13408.374)	/	((7322.608 + 2242) / 13545.456)
	=	0.670702	/	0.706112
	=	0.9499

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
	=	(1492.178 - -35.246	-	1995.667)	/	13408.374
	=	-0.034922

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.

Moody's has a M-score of -2.67 suggests that the company is unlikely to be a manipulator.

Moody's Beneish M-Score Related Terms

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Moody's (WBO:MOCO) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Capital Markets » Moody's Corporation (WBO:MOCO) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

MCO:USA MCO:Mexico DUT:Germany DUT:Germany MCOR34:Brazil

Address

7 World Trade Center at 250 Greenwich Street, New York, NY, USA, 10007

Website

https://www.moodys.com

Moody's, along with S&P Ratings, is a leading provider of credit ratings on fixed-income securities. The ratings segment, Moody's Investors Service, includes corporates, structured finance, financial institutions, and public finance ratings. MIS represents a majority of the firm's revenue and profits. The other segment, Moody's Analytics, consists of research, data, and analytics as well as enterprise risk solutions. RD&A's products include credit research, quantitative credit scores, economic research, business intelligence, know-your-customer tools, commercial real estate data and analytical tools, and training services. ERS includes risk-management software solutions for financial institutions.