Procter Beneish M Score

PG -  USA Stock  

USD 149.02  1.55  1.05%

This module uses fundamental data of Procter Gamble to approximate the value of its Beneish M Score. Procter Gamble 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. Please check Procter Gamble Piotroski F Score and Procter Gamble Altman Z Score analysis.

Procter Beneish M Score 

 
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Procter Gamble Debt Current is projected to decrease significantly based on the last few years of reporting. The past year's Debt Current was at 8.73 Billion. Procter Gamble PPandE Turnover is projected to slightly decrease based on the last few years of reporting. The past year's PPandE Turnover was at 3.59. The current year Accounts Payable Turnover is expected to grow to 7.99, whereas Long Term Debt to Equity is forecasted to decline to 0.41.
At this time, it appears that Procter Gamble is an unlikely manipulator. The earnings manipulation may begin if Procter Gamble'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 Procter Gamble 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 Procter Gamble'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.
-2.24
Beneish M Score - Unlikely Manipulator
Elasticity of Receivables
0.95
Asset Quality
1.1
Expense Coverage
0.97
Gross Margin Strengs
1.09
Accruals Factor
0.97
Depreciation Resistance
0.99
Net Sales Growth
1.1
Financial Leverage Condition
0.83

Procter Gamble 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 Procter Gamble'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
Revenues83.5 B76.1 B
Significantly Up
Decreasing
Slightly volatile
Selling General and Administrative Expense18.3 B17.2 B
Notably Up
Decreasing
Slightly volatile
Net Cash Flow from Operations16 B18.4 B
Fairly Down
Increasing
Slightly volatile
Depreciation Amortization and Accretion2.6 B2.5 B
Fairly Up
Decreasing
Slightly volatile
Total Assets136.7 B119.3 B
Fairly Up
Decreasing
Slightly volatile
Investments7.3 BB
Notably Up
Increasing
Slightly volatile
Investments Current7.3 BB
Notably Up
Increasing
Slightly volatile
Property Plant and Equipment Net24.7 B24.5 B
Fairly Up
Increasing
Slightly volatile
Trade and Non Trade Receivables4.6 B4.5 B
Sufficiently Up
Decreasing
Slightly volatile
Total Liabilities67.7 B72.9 B
Significantly Down
Increasing
Very volatile
Current Assets22.9 B23.1 B
Fairly Down
Increasing
Very volatile
Assets Non Current88 B83.4 B
Notably Up
Decreasing
Slightly volatile
Current Liabilities29.9 B33.1 B
Moderately Down
Increasing
Slightly volatile
Liabilities Non Current34.4 B33.8 B
Fairly Up
Decreasing
Slightly volatile
Total Debt27.6 B27.1 B
Fairly Up
Decreasing
Slightly volatile
Debt Current9.5 B8.7 B
Significantly Up
Decreasing
Slightly volatile
Debt Non Current18.1 B18.4 B
Fairly Down
Decreasing
Slightly volatile
Operating Income17.5 B18 B
Fairly Down
Increasing
Very volatile
Gross Margin55.8251.2494
Significantly Up
Increasing
Slightly volatile

Procter Gamble 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 Procter Gamble's different financial indicators related to revenue, expenses, operating profit, and net earnings helps investors identify and prioritize their investing strategies towards Procter Gamble in a much-optimized way. Analyzing correlations between earnings drivers directly associated with dollar figures is the most effective way to find Procter Gamble's degree of accounting gimmicks and manipulations.

About Procter Gamble 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.

Cost of Revenue

32.08 BillionShare
Procter Gamble Cost of Revenue is projected to decrease significantly based on the last few years of reporting. The past year's Cost of Revenue was at 31.29 Billion

Procter Gamble 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 Procter Gamble. 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.
201620172018201920202021 (projected)
Revenues65.06 B66.83 B67.68 B70.95 B76.12 B83.51 B
Total Assets120.41 B118.31 B115.09 B120.7 B119.31 B136.74 B
Current Assets26.49 B23.32 B22.47 B27.99 B23.09 B22.86 B
Assets Non Current93.35 B93.91 B94.99 B92.62 B83.36 B87.96 B
Total Liabilities65.22 B66.02 B67.9 B74.18 B72.93 B67.72 B
Current Liabilities30.21 B28.24 B30.01 B32.98 B33.13 B29.91 B
Total Debt30.6 B31.59 B31.29 B30.09 B27.08 B27.63 B
Debt Current11.65 B13.55 B10.42 B9.7 B8.73 B9.53 B
Debt Non Current18.95 B18.04 B20.86 B20.39 B18.36 B18.11 B
Operating Income13.96 B13.71 B5.49 B15.71 B17.99 B17.52 B
Investments6.25 B9.57 B9.28 B6.05 B6.96 B7.33 B
Investments Current6.25 B9.57 B9.28 B6.05 B6.96 B7.33 B
Gross Margin49.9948.7348.6350.3251.2555.82

About Procter Gamble Fundamental Analysis

The Macroaxis Fundamental Analysis modules help investors analyze Procter Gamble's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of Procter Gamble using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at the intrinsic value of Procter Gamble 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.
The Procter Gamble Company provides branded consumer packaged goods to consumers in North and Latin America, Europe, the Asia Pacific, Greater China, India, the Middle East, and Africa. The Procter Gamble Company was founded in 1837 and is headquartered in Cincinnati, Ohio. Procter Gamble operates under Household Personal Products classification in the United States and is traded on New York Stock Exchange. It employs 101000 people.

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Please check Procter Gamble Piotroski F Score and Procter Gamble Altman Z Score analysis. Note that the Procter Gamble information on this page should be used as a complementary analysis to other Procter Gamble'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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.

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Is Procter Gamble'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 Procter Gamble. If investors know Procter 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 Procter Gamble 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 Procter Gamble is measured differently than its book value, which is the value of Procter that is recorded on the company's balance sheet. Investors also form their own opinion of Procter Gamble's value that differs from its market value or its book value, called intrinsic value, which is Procter Gamble'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 Procter Gamble's market value can be influenced by many factors that don't directly affect Procter Gamble'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 Procter Gamble's value and its price as these two are different measures arrived at by different means. Investors typically determine Procter Gamble value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Procter Gamble'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.