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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 -2.63 no higher than -1.78, which implies that the company is unlikely to be a manipulator.
The historical rank and industry rank for Caterpillar's Beneish M-Score or its related term are showing as below:
During the past 13 years, the highest Beneish M-Score of Caterpillar was -2.42. The lowest was -2.90. And the median was -2.64.
The historical data trend for Caterpillar'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.
Caterpillar Annual Data | |||||||||||||||||||||
Trend | Dec14 | Dec15 | Dec16 | Dec17 | Dec18 | Dec19 | Dec20 | Dec21 | Dec22 | Dec23 | |||||||||||
Beneish M-Score | Get a 7-Day Free Trial | -2.47 | -2.67 | -2.58 | -2.52 | -2.63 |
Caterpillar Quarterly Data | ||||||||||||||||||||
Jun19 | Sep19 | Dec19 | Mar20 | Jun20 | Sep20 | Dec20 | Mar21 | Jun21 | Sep21 | Dec21 | Mar22 | Jun22 | Sep22 | Dec22 | Mar23 | Jun23 | Sep23 | Dec23 | Mar24 | |
Beneish M-Score | Get a 7-Day Free Trial | -2.61 | -2.54 | -2.56 | -2.63 | -2.63 |
For the Farm & Heavy Construction Machinery subindustry, Caterpillar'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.
For the Farm & Heavy Construction Machinery industry and Industrials sector, Caterpillar's Beneish M-Score distribution charts can be found below:
* The bar in red indicates where Caterpillar's Beneish M-Score falls into.
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 Caterpillar 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 * 0.9407 | + | 0.528 * 0.8817 | + | 0.404 * 1.0574 | + | 0.892 * 1.0859 | + | 0.115 * 1.0639 | |
- | 0.172 * SGAI | + | 4.679 * TATA | - | 0.327 * LVGI | |||||||
- | 0.172 * 1.0354 | + | 4.679 * -0.027442 | - | 0.327 * 1.0075 | |||||||
= | -2.63 |
* 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 (Mar24) TTM: | Last Year (Mar23) TTM: |
Total Receivables was $18,742 Mil. Revenue was 15799 + 17070 + 16810 + 17318 = $66,997 Mil. Gross Profit was 5839 + 5766 + 5947 + 6008 = $23,560 Mil. Total Current Assets was $43,664 Mil. Total Assets was $83,741 Mil. Property, Plant and Equipment(Net PPE) was $12,538 Mil. Depreciation, Depletion and Amortization(DDA) was $2,136 Mil. Selling, General, & Admin. Expense(SGA) was $6,485 Mil. Total Current Liabilities was $32,371 Mil. Long-Term Debt & Capital Lease Obligation was $24,831 Mil. Net Income was 2856 + 2676 + 2794 + 2922 = $11,248 Mil. Non Operating Income was 20 + 71 + 60 + 31 = $182 Mil. Cash Flow from Operations was 2052 + 4003 + 4060 + 3249 = $13,364 Mil. |
Total Receivables was $18,349 Mil. Revenue was 15862 + 16597 + 14994 + 14247 = $61,700 Mil. Gross Profit was 5542 + 4795 + 4641 + 4152 = $19,130 Mil. Total Current Assets was $45,660 Mil. Total Assets was $83,649 Mil. Property, Plant and Equipment(Net PPE) was $11,973 Mil. Depreciation, Depletion and Amortization(DDA) was $2,194 Mil. Selling, General, & Admin. Expense(SGA) was $5,768 Mil. Total Current Liabilities was $31,842 Mil. Long-Term Debt & Capital Lease Obligation was $24,873 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) |
= | (18742 / 66997) | / | (18349 / 61700) | |
= | 0.279744 | / | 0.297391 | |
= | 0.9407 |
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) | |
= | (19130 / 61700) | / | (23560 / 66997) | |
= | 0.310049 | / | 0.351658 | |
= | 0.8817 |
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 - (43664 + 12538) / 83741) | / | (1 - (45660 + 11973) / 83649) | |
= | 0.328859 | / | 0.311014 | |
= | 1.0574 |
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 | |
= | 66997 | / | 61700 | |
= | 1.0859 |
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)) |
= | (2194 / (2194 + 11973)) | / | (2136 / (2136 + 12538)) | |
= | 0.154867 | / | 0.145564 | |
= | 1.0639 |
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) |
= | (6485 / 66997) | / | (5768 / 61700) | |
= | 0.096795 | / | 0.093485 | |
= | 1.0354 |
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) |
= | ((24831 + 32371) / 83741) | / | ((24873 + 31842) / 83649) | |
= | 0.683082 | / | 0.678012 | |
= | 1.0075 |
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 | |
= | (11248 - 182 | - | 13364) | / | 83741 | |
= | -0.027442 |
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.
Caterpillar has a M-score of -2.63 suggests that the company is unlikely to be a manipulator.
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Anthony D. Fassino | officer: Group President | 510 LAKE COOK ROAD, SUITE 100, DEERFIELD IL 60015 |
Cheryl H Johnson | officer: Chief Human Resources Officer | 40 WESTMINSTER STREET, PROVIDENCE RI 02903 |
Joseph E Creed | officer: Interim CFO | 510 LAKE COOK ROAD, SUITE 100, DEERFIELD IL 60015 |
Denise C Johnson | officer: Group President | C/O CATERPILLAR, INCORPORATED, 901 WEST WASHINGTON, CV41110, EAST PEORIA IL 61630 |
Lange Bob De | officer: Group President | 510 LAKE COOK ROAD, SUITE 100, DEERFIELD IL 60015 |
Fish James C Jr | director | 800 CAPITOL STREET 3000, HOUSTON TX 77002 |
Judith Fran Marks | director | C/O HUBBELL INCORPORATED, 40 WATERVIEW DRIVE, SHELTON CT 06484 |
David Maclennan | director | 14701 CHARLSON ROAD, EDEN PRAIRIE MN 55347 |
Suzette M Long | officer: Int. Executive Vice President | 510 LAKE COOK ROAD, SUITE 100, DEERFILED IL 60015 |
Daniel M Dickinson | director | THAYER CAPITAL PARTNERS, 1455 PENNSYLVANIA AVENUE NW, STE 350, WASHINGTON DC 20004 |
William E Schaupp | officer: Chief Accounting Officer | PPG INDUSTRIES, INC., ONE PPG PLACE, PITTSBURGH PA 15272 |
Gary Michael Marvel | officer: Chief Accounting Officer | 510 LAKE COOK ROAD, SUITE 100, DEERFIELD IL 60015 |
Gerald Johnson | director | 300 RENAISSANCE CENTER, M/C: 482-C23-A68, DETROIT MI 48265 |
Ramin Younessi | officer: Group President | 510 LAKE COOK ROAD, SUITE 100, DEERFIELD IL 60015 |
William P Ainsworth | officer: Group President | 510 LAKE COOK ROAD, SUITE 100, DEERFIELD X1 60015 |
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