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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 -3.06 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Carnival Corp was 10.14. The lowest was -3.24. And the median was -2.42.
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 * 0.5521||+||0.528 * 1.0566||+||0.404 * 1.0269||+||0.892 * 1.0175||+||0.115 * 0.9897|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.1039||+||4.679 * -0.0483||-||0.327 * 0.9479|
|This Year (May14) TTM:||Last Year (May13) TTM:|
|Accounts Receivable was $587 Mil.|
Revenue was 3633 + 3585 + 3658 + 4726 = $15,602 Mil.
Gross Profit was 1068 + 997 + 1037 + 1809 = $4,911 Mil.
Total Current Assets was $1,625 Mil.
Total Assets was $40,526 Mil.
Property, Plant and Equipment(Net PPE) was $33,515 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,622 Mil.
Selling, General & Admin. Expense(SGA) was $1,996 Mil.
Total Current Liabilities was $7,401 Mil.
Long-Term Debt was $7,880 Mil.
Net Income was 106 + -15 + 66 + 934 = $1,091 Mil.
Non Operating Income was 22 + -16 + 32 + 58 = $96 Mil.
Cash Flow from Operations was 1196 + 477 + 475 + 803 = $2,951 Mil.
|Accounts Receivable was $1,045 Mil.
Revenue was 3479 + 3593 + 3578 + 4684 = $15,334 Mil.
Gross Profit was 992 + 994 + 1027 + 2087 = $5,100 Mil.
Total Current Assets was $2,324 Mil.
Total Assets was $39,979 Mil.
Property, Plant and Equipment(Net PPE) was $32,481 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,555 Mil.
Selling, General & Admin. Expense(SGA) was $1,777 Mil.
Total Current Liabilities was $8,055 Mil.
Long-Term Debt was $7,848 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)|
|=||(587 / 15602)||/||(1045 / 15334)|
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)|
|=||(997 / 15334)||/||(1068 / 15602)|
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 - (1625 + 33515) / 40526)||/||(1 - (2324 + 32481) / 39979)|
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))|
|=||(1555 / (1555 + 32481))||/||(1622 / (1622 + 33515))|
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)|
|=||(1996 / 15602)||/||(1777 / 15334)|
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)|
|=||((7880 + 7401) / 40526)||/||((7848 + 8055) / 39979)|
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|
|=||(1091 - 96||-||2951)||/||40526|
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 -3.06 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