Ecolab Beneish M Score

ECL
 Stock
  

USD 145.48  4.35  2.90%   

This module uses fundamental data of Ecolab to approximate the value of its Beneish M Score. Ecolab 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. Continue to Ecolab Piotroski F Score and Ecolab Altman Z Score analysis.
  
Ecolab Debt Current is relatively stable at the moment as compared to the past year. The company's current value of Debt Current is estimated at 570.69 Million. Issuance Repayment of Debt Securities is expected to hike to about 2.3 B this year, although the value of Total Debt will most likely fall to nearly 8.9 B. Ecolab Inventory Turnover is relatively stable at the moment as compared to the past year. The company's current value of Inventory Turnover is estimated at 6.07. Accounts Payable Turnover is expected to hike to 12.56 this year, although the value of Operating Margin will most likely fall to 11.94.
At this time, it appears that Ecolab Inc is an unlikely manipulator. The earnings manipulation may begin if Ecolab'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 Ecolab 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 Ecolab'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.
-2.8
Beneish M Score - Unlikely Manipulator
Elasticity of Receivables1.17Focus
Asset QualityN/AFocus
Expense Coverage1.06Focus
Gross Margin Strengs1.18Focus
Accruals Factor1.06Focus
Depreciation Resistance0.98Focus
Net Sales Growth0.93Focus
Financial Leverage Condition1.03Focus

Ecolab 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 Ecolab'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
Selling General and Administrative Expense3.4 B3.4 B
Fairly Down
Increasing
Very volatile
Revenues11.9 B12.7 B
Significantly Down
Increasing
Slightly volatile
Trade and Non Trade Receivables2.7 B2.5 B
Significantly Up
Increasing
Slightly volatile
Property Plant and Equipment Net3.8 B3.7 B
Sufficiently Up
Increasing
Slightly volatile
Operating Income1.5 B1.6 B
Notably Down
Increasing
Slightly volatile
Net Cash Flow from Operations1.8 B2.1 B
Fairly Down
Increasing
Slightly volatile
Liabilities Non Current10.4 B10.4 B
Slightly Up
Increasing
Slightly volatile
Current Liabilities3.3 B3.6 B
Significantly Down
Increasing
Stable
Total Liabilities12.2 B14 B
Fairly Down
Increasing
Slightly volatile
Gross Margin47.2640.189
Fairly Up
Decreasing
Slightly volatile
Depreciation Amortization and Accretion894.4 M843.1 M
Notably Up
Increasing
Slightly volatile
Debt Non Current8.2 B8.6 B
Notably Down
Increasing
Slightly volatile
Debt Current570.7 M411 M
Significantly Up
Decreasing
Slightly volatile
Total Debt8.9 BB
Fairly Down
Increasing
Slightly volatile
Assets Non Current17.1 B16.5 B
Sufficiently Up
Increasing
Slightly volatile
Current Assets4.4 B4.7 B
Significantly Down
Increasing
Slightly volatile
Total Assets18.8 B21.2 B
Fairly Down
Increasing
Slightly volatile

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

About Ecolab 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.

Operating Expenses

3.48 Billion

Ecolab Operating Expenses is relatively stable at the moment as compared to the past year. The company's current value of Operating Expenses is estimated at 3.48 Billion

Ecolab 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 Ecolab. 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)
Revenues13.84 B14.67 B14.91 B11.79 B12.73 B11.86 B
Total Assets19.96 B20.07 B20.87 B18.13 B21.21 B18.78 B
Current Assets4.6 B4.68 B4.83 B5.12 B4.69 B4.37 B
Assets Non Current15.37 B15.4 B16.04 B13.01 B16.52 B17.09 B
Total Liabilities12.34 B12.07 B12.18 B11.96 B13.98 B12.16 B
Current Liabilities3.43 B3.69 B3.63 B2.93 B3.55 B3.29 B
Total Debt7.32 B7.05 B6.7 B6.99 B9.04 B8.86 B
Debt Current564.4 M743.6 M380.5 M17.3 M411 M570.69 M
Debt Non Current6.76 B6.3 B6.32 B6.97 B8.63 B8.15 B
Operating Income1.97 B1.95 B2.01 B1.4 B1.6 B1.5 B
Gross Margin46.4941.1941.4841.4340.1947.26

Ecolab ESG Sustainability

Some studies have found that companies with high sustainability scores are getting higher valuations than competitors with lower social-engagement activities. While most ESG disclosures are voluntary and do not directly affect the long term financial condition, Ecolab's sustainability indicators can be used to identify proper investment strategies using environmental, social, and governance scores that are crucial to Ecolab's managers, analysts, and investors.
Environment Score
Governance Score
Social Score

About Ecolab Fundamental Analysis

The Macroaxis Fundamental Analysis modules help investors analyze Ecolab Inc's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of Ecolab using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at the intrinsic value of Ecolab Inc 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.
Ecolab Inc. provides water, hygiene, and infection prevention solutions and services in the United States and internationally. The company was founded in 1923 and is headquartered in Saint Paul, Minnesota. Ecolab operates under Specialty Chemicals classification in the United States and is traded on New York Stock Exchange. It employs 47000 people.

Be your own money manager

Our tools can tell you how much better you can do entering a position in Ecolab without increasing your portfolio risk or giving up the expected return. As an individual investor, you need to find a reliable way to track all your investment portfolios. However, your requirements will often be based on how much of the process you decide to do yourself. In addition to allowing all investors analytical transparency into all their portfolios, our tools can evaluate risk-adjusted returns of your individual positions relative to your overall portfolio.

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Pair Trading with Ecolab

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Ecolab position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Ecolab will appreciate offsetting losses from the drop in the long position's value.

Moving together with Ecolab

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The ability to find closely correlated positions to Ecolab could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Ecolab when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Ecolab - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Ecolab Inc to buy it.
The correlation of Ecolab is a statistical measure of how it moves in relation to other equities. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Ecolab moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Ecolab Inc moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Ecolab can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Pair CorrelationCorrelation Matching
Continue to Ecolab Piotroski F Score and Ecolab Altman Z Score analysis. Note that the Ecolab Inc information on this page should be used as a complementary analysis to other Ecolab'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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.

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When running Ecolab Inc price analysis, check to measure Ecolab's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Ecolab is operating at the current time. Most of Ecolab's value examination focuses on studying past and present price action to predict the probability of Ecolab's future price movements. You can analyze the entity against its peers and financial market as a whole to determine factors that move Ecolab's price. Additionally, you may evaluate how the addition of Ecolab to your portfolios can decrease your overall portfolio volatility.
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Is Ecolab'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 Ecolab. If investors know Ecolab 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 Ecolab listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth YOY
0.08
Market Capitalization
41.4 B
Quarterly Revenue Growth YOY
0.11
Return On Assets
0.0583
Return On Equity
16.12
The market value of Ecolab Inc is measured differently than its book value, which is the value of Ecolab that is recorded on the company's balance sheet. Investors also form their own opinion of Ecolab's value that differs from its market value or its book value, called intrinsic value, which is Ecolab'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 Ecolab's market value can be influenced by many factors that don't directly affect Ecolab'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 Ecolab's value and its price as these two are different measures arrived at by different means. Investors typically determine Ecolab value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Ecolab'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.