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The zones of discrimination for M-Score is as such:
An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.
Carnival Corp has a M-score of -2.90 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Carnival Corp was 13.70. The lowest was -3.24. And the median was -2.52.
The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (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 Carnival Corp 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 * 0.777||+||0.528 * 0.9371||+||0.404 * 1.0216||+||0.892 * 1.0291||+||0.115 * 0.9865|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.096||+||4.679 * -0.048||-||0.327 * 0.9268|
|This Year (Aug14) TTM:||Last Year (Aug13) TTM:|
|Accounts Receivable was $355 Mil.|
Revenue was 4947 + 3633 + 3585 + 3658 = $15,823 Mil.
Gross Profit was 2193 + 1068 + 997 + 1037 = $5,295 Mil.
Total Current Assets was $1,602 Mil.
Total Assets was $39,997 Mil.
Property, Plant and Equipment(Net PPE) was $33,073 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,629 Mil.
Selling, General & Admin. Expense(SGA) was $2,038 Mil.
Total Current Liabilities was $7,056 Mil.
Long-Term Debt was $6,967 Mil.
Net Income was 1247 + 106 + -15 + 66 = $1,404 Mil.
Non Operating Income was 16 + 22 + -16 + 32 = $54 Mil.
Cash Flow from Operations was 1120 + 1196 + 477 + 475 = $3,268 Mil.
|Accounts Receivable was $444 Mil.
Revenue was 4726 + 3479 + 3593 + 3578 = $15,376 Mil.
Gross Profit was 1809 + 992 + 994 + 1027 = $4,822 Mil.
Total Current Assets was $2,634 Mil.
Total Assets was $40,393 Mil.
Property, Plant and Equipment(Net PPE) was $32,498 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,578 Mil.
Selling, General & Admin. Expense(SGA) was $1,807 Mil.
Total Current Liabilities was $7,488 Mil.
Long-Term Debt was $7,792 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(355 / 15823)||/||(444 / 15376)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(1068 / 15376)||/||(2193 / 15823)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (1602 + 33073) / 39997)||/||(1 - (2634 + 32498) / 40393)|
4. SGI = Sales Growth Index
Ratio of sales 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.
5. DEPI = Depreciation Index
Measured as the ratio of the rate of depreciation 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))|
|=||(1578 / (1578 + 32498))||/||(1629 / (1629 + 33073))|
6. SGAI = Sales, General and Administrative expenses Index
The ratio of SGA expenses 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)|
|=||(2038 / 15823)||/||(1807 / 15376)|
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$sgai= in leverage
|LVGI||=||((LTD_t + CurrentLiabilities_t) / TotalAssets_t)||/||((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)|
|=||((6967 + 7056) / 39997)||/||((7792 + 7488) / 40393)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(1404 - 54||-||3268)||/||39997|
An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.
Carnival Corp has a M-score of -2.90 suggests that the company will not be a manipulator.
Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations
Carnival Corp Annual Data
Carnival Corp Quarterly Data