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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.
During the past 13 years, the highest Beneish M-Score of Delhaize Group SA was -2.44. The lowest was -39.33. And the median was -2.79.
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 Delhaize Group SA 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 * 1.1664||+||0.528 * 0.9934||+||0.404 * 0.9613||+||0.892 * 1.0073||+||0.115 * 1.0394|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9949||+||4.679 * -0.0573||-||0.327 * 0.9952|
|This Year (Mar16) TTM:||Last Year (Mar15) TTM:|
|Accounts Receivable was $771 Mil.|
Revenue was 6851.89309577 + 6884.53159041 + 6892.25589226 + 6861.95286195 = $27,491 Mil.
Gross Profit was 1679.28730512 + 1655.77342048 + 1672.27833895 + 1674.52300786 = $6,682 Mil.
Total Current Assets was $4,273 Mil.
Total Assets was $13,864 Mil.
Property, Plant and Equipment(Net PPE) was $4,692 Mil.
Depreciation, Depletion and Amortization(DDA) was $745 Mil.
Selling, General & Admin. Expense(SGA) was $5,797 Mil.
Total Current Liabilities was $3,458 Mil.
Long-Term Debt was $2,616 Mil.
Net Income was 121.380846325 + 124.183006536 + 132.435465769 + 118.967452301 = $497 Mil.
Non Operating Income was 1.1135857461 + 8.71459694989 + -3.367003367 + 6.73400673401 = $13 Mil.
Cash Flow from Operations was -159.242761693 + 676.470588235 + 193.041526375 + 567.901234568 = $1,278 Mil.
|Accounts Receivable was $656 Mil.
Revenue was 6298.7012987 + 6789.14919852 + 7038.65979381 + 7164.40217391 = $27,291 Mil.
Gross Profit was 1536.7965368 + 1644.88286067 + 1689.43298969 + 1718.75 = $6,590 Mil.
Total Current Assets was $3,991 Mil.
Total Assets was $13,550 Mil.
Property, Plant and Equipment(Net PPE) was $4,577 Mil.
Depreciation, Depletion and Amortization(DDA) was $760 Mil.
Selling, General & Admin. Expense(SGA) was $5,784 Mil.
Total Current Liabilities was $3,274 Mil.
Long-Term Debt was $2,690 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)|
|=||(770.601336303 / 27490.6334404)||/||(655.844155844 / 27290.9124649)|
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)|
|=||(1655.77342048 / 27290.9124649)||/||(1679.28730512 / 27490.6334404)|
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 - (4272.8285078 + 4691.53674833) / 13864.142539)||/||(1 - (3991.34199134 + 4576.83982684) / 13549.7835498)|
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))|
|=||(760.18830179 / (760.18830179 + 4576.83982684))||/||(745.030181578 / (745.030181578 + 4691.53674833))|
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)|
|=||(5797.26946158 / 27490.6334404)||/||(5784.44798583 / 27290.9124649)|
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)|
|=||((2615.81291759 + 3457.68374165) / 13864.142539)||/||((2690.47619048 + 3273.80952381) / 13549.7835498)|
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|
|=||(496.966770931 - 13.195186063||-||1278.17058749)||/||13864.142539|
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.
Delhaize Group SA has a M-score of -2.60 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
Delhaize Group SA Annual Data
Delhaize Group SA Quarterly Data