Microsoft Beneish M Score

MSFT -  USA Stock  

USD 302.65  7.55  2.43%

This module uses fundamental data of Microsoft Corp to approximate the value of its Beneish M Score. Microsoft Corp M Score tells investors if the company management is likely to be manipulating earnings. The score is calculated using eight financial indicators that are adjusted by a specific multiplier. Please note, the M Score is a probabilistic model and cannot detect companies that manipulate their earnings with 100% accuracy. Additionally, see Microsoft Corp Piotroski F Score and Microsoft Corp Altman Z Score analysis.

Microsoft Beneish M Score 

 
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Microsoft Corp Long Term Debt to Equity is comparatively stable at the moment as compared to the past year. Microsoft Corp reported Long Term Debt to Equity of 0.32 in 2021. Debt to Equity Ratio is likely to gain to 1.61 in 2022, whereas Total Debt is likely to drop slightly above 69.5 B in 2022. Microsoft Corp Revenue to Assets are comparatively stable at the moment as compared to the past year. Microsoft Corp reported Revenue to Assets of 0.58 in 2021. Quick Ratio is likely to gain to 1.87 in 2022, whereas Cash and Equivalents Turnover is likely to drop 10.74 in 2022.
At this time, it appears that Microsoft Corp is an unlikely manipulator. The earnings manipulation may begin if Microsoft Corp's top management creates an artificial sense of financial success, forcing the stock price to be traded at a high price-earnings multiple than it should be. In general, excessive earnings management by Microsoft Corp executives may lead to removing some of the operating profits from subsequent periods to inflate earnings in the following periods. This way, the manipulation of Microsoft Corp's earnings can lead to misrepresentations of actual financial condition, taking the otherwise loyal stakeholders on to the path of questionable ethical practices and plain fraud.
-2.58
Beneish M Score - Unlikely Manipulator
Elasticity of Receivables
0.99
Asset Quality
0.56
Expense Coverage
1.13
Gross Margin Strengs
1.0
Accruals Factor
1.13
Depreciation Resistance
1.23
Net Sales Growth
0.84
Financial Leverage Condition
1.02

Microsoft Corp Beneish M-Score Indicator Trends

The cure to earnings manipulation is the transparency of financial reporting. It will typically remove the temptation of the top executives to inflate earnings (i.e., to promote the idea of 'winning at any cost'). Because a healthy internal audit department can enhance transparency, the board should promote the auditors' access to all the record-keeping systems across the enterprise. For example, if Microsoft Corp's auditors report directly to the board (not management), the managers will be reluctant to manipulate simply due to the fear of punishment. On the other hand, the auditors will be free to investigate the ledgers properly because they know that the board has their back.
Current ValueLast YearChange From Last Year 10 Year Trend
Revenues161.6 B193.3 B
Fairly Down
Increasing
Slightly volatile
Selling General and Administrative Expense27.5 B29 B
Notably Down
Increasing
Slightly volatile
Net Cash Flow from Operations70.4 B88.3 B
Significantly Down
Increasing
Slightly volatile
Depreciation Amortization and Accretion11.4 B13.4 B
Fairly Down
Increasing
Slightly volatile
Total Assets325.4 B383.8 B
Fairly Down
Increasing
Slightly volatile
Investments6.2 B5.4 B
Fairly Up
Decreasing
Slightly volatile
Investments Non Current6.2 B5.4 B
Fairly Up
Decreasing
Slightly volatile
Property Plant and Equipment Net87.9 B81.4 B
Significantly Up
Increasing
Slightly volatile
Trade and Non Trade Receivables36.3 B43.7 B
Significantly Down
Increasing
Slightly volatile
Total Liabilities188 B220.6 B
Fairly Down
Increasing
Slightly volatile
Current Assets191.2 B212.1 B
Moderately Down
Increasing
Slightly volatile
Assets Non Current185.3 B171.8 B
Significantly Up
Increasing
Slightly volatile
Current Liabilities85.1 B102 B
Fairly Down
Increasing
Slightly volatile
Liabilities Non Current102.8 B118.6 B
Fairly Down
Increasing
Slightly volatile
Total Debt69.5 B77.9 B
Fairly Down
Increasing
Slightly volatile
Debt Current8.2 B9.3 B
Fairly Down
Increasing
Slightly volatile
Debt Non Current61.6 B68.7 B
Moderately Down
Increasing
Slightly volatile
Operating Income86.8 B80.4 B
Significantly Up
Increasing
Slightly volatile
Gross Margin0.620.62
Steady
Decreasing
Slightly volatile

Microsoft Corp Beneish M-Score Driver Matrix

One of the toughest challenges investors face today is learning how to quickly synthesize historical financial statements and information provided by the company, SEC reporting, and various external parties in order to detect the potential manipulation of earnings. Understanding the correlation between Microsoft Corp's different financial indicators related to revenue, expenses, operating profit, and net earnings helps investors identify and prioritize their investing strategies towards Microsoft Corp in a much-optimized way. Analyzing correlations between earnings drivers directly associated with dollar figures is the most effective way to find Microsoft Corp's degree of accounting gimmicks and manipulations.

About Microsoft Corp Beneish M Score

M-Score is one of many grading techniques for value stocks. It was developed by Professor M. Daniel Beneish of the Kelley School of Business at Indiana University and published in 1999 under the paper titled The Detection of Earnings Manipulation. The Beneish score is a multi-factor model that utilizes financial identifiers to compile eight variables used to classify whether a company has manipulated its reported earnings. The variables are built from the officially filed financial statements to create a final score call 'M Score.' The score helps to identify companies that are likely to manipulate their profits if they show deteriorating gross margins, operating expenses, and leverage against growing revenue.

Depreciation Amortization and Accretion

11.41 BillionShare
Microsoft Corp Depreciation Amortization and Accretion is comparatively stable at the moment as compared to the past year. Microsoft Corp reported Depreciation Amortization and Accretion of 13.44 Billion in 2021

Microsoft Corp Earnings Manipulation Drivers

Although earnings manipulation is typically not the result of intentional misconduct by the c-level executives, it is still a widespread practice by the senior management of public companies such as Microsoft Corp. It is usually done by a series of misrepresentations of various accounting rules and operating activities across multiple financial cycles. The best way to spot the manipulation is to examine the historical financial statement to find inconsistencies in earning reports to find trends in assets or liabilities that are not sustainable in the future.
201720182019202020212022 (projected)
Revenues110.36 B125.84 B143.01 B168.09 B193.3 B161.58 B
Total Assets258.85 B286.56 B301.31 B333.78 B383.85 B325.37 B
Current Assets169.66 B175.55 B181.91 B184.41 B212.07 B191.21 B
Assets Non Current89.19 B111 B119.4 B149.37 B171.78 B185.34 B
Total Liabilities176.13 B184.23 B183.01 B191.79 B220.56 B187.99 B
Current Liabilities58.49 B69.42 B72.31 B88.66 B101.96 B85.14 B
Total Debt81.81 B78.37 B71 B67.78 B77.94 B69.52 B
Debt Current4 B5.52 B3.75 B8.07 B9.28 B8.25 B
Debt Non Current77.81 B72.85 B67.25 B59.7 B68.66 B61.57 B
Operating Income35.06 B42.96 B52.96 B69.92 B80.4 B86.75 B
Investments1.86 B2.65 B2.96 B5.98 B5.39 B6.2 B

About Microsoft Corp Fundamental Analysis

The Macroaxis Fundamental Analysis modules help investors analyze Microsoft Corp's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of Microsoft Corp using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at the intrinsic value of Microsoft Corp based on its fundamental data. In general, a quantitative approach, as applied to this company, focuses on analyzing financial statements comparatively, whereas a qaualitative method uses data that is important to a company's growth but cannot be measured and presented in a numerical way.
Please read more on our fundamental analysis page.
Microsoft Corporation develops, licenses, and supports software, services, devices, and solutions worldwide. Microsoft Corporation was founded in 1975 and is based in Redmond, Washington. Microsoft Corp operates under SoftwareInfrastructure classification in the United States and is traded on NASDAQ Exchange. It employs 181000 people.

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Additionally, see Microsoft Corp Piotroski F Score and Microsoft Corp Altman Z Score analysis. Note that the Microsoft Corp information on this page should be used as a complementary analysis to other Microsoft Corp's statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

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Is Microsoft Corp's industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Microsoft Corp. If investors know Microsoft will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Microsoft Corp listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
The market value of Microsoft Corp is measured differently than its book value, which is the value of Microsoft that is recorded on the company's balance sheet. Investors also form their own opinion of Microsoft Corp's value that differs from its market value or its book value, called intrinsic value, which is Microsoft Corp's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Microsoft Corp's market value can be influenced by many factors that don't directly affect Microsoft Corp's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Microsoft Corp's value and its price as these two are different measures arrived at by different means. Investors typically determine Microsoft Corp value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Microsoft Corp's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.