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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.
Walt Disney Co has a M-score of signals that the company is a manipulator.
During the past 13 years, the highest Beneish M-Score of Walt Disney Co was -1.04. The lowest was -2.86. And the median was -2.46.
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 Walt Disney Co 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 *||+||0.528 *||+||0.404 *||+||0.892 *||+||0.115 *|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 *||+||4.679 *||-||0.327 *|
* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.
|This Year (Dec13) TTM:||Last Year (Dec12) TTM:|
|Accounts Receivable was $8,013 Mil.|
Revenue was 12309 + 11568 + 11578 + 10554 = $46,009 Mil.
Gross Profit was 2665 + 2159 + 3004 + 2195 = $10,023 Mil.
Total Current Assets was $15,763 Mil.
Total Assets was $83,166 Mil.
Property, Plant and Equipment(Net PPE) was $22,567 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,239 Mil.
Selling, General & Admin. Expense(SGA) was $0 Mil.
Total Current Liabilities was $15,696 Mil.
Long-Term Debt was $11,714 Mil.
Net Income was 1840 + 1394 + 1847 + 1513 = $6,594 Mil.
Non Operating Income was 245 + 184 + 232 + 195 = $856 Mil.
Cash Flow from Operations was 1212 + 2735 + 3413 + 2160 = $9,520 Mil.
|Accounts Receivable was $7,315 Mil.
Revenue was 11341 + 10782 + 11088 + 9629 = $42,840 Mil.
Gross Profit was 2092 + 2024 + 2960 + 1687 = $8,763 Mil.
Total Current Assets was $14,322 Mil.
Total Assets was $80,642 Mil.
Property, Plant and Equipment(Net PPE) was $21,671 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,016 Mil.
Selling, General & Admin. Expense(SGA) was $0 Mil.
Total Current Liabilities was $14,498 Mil.
Long-Term Debt was $19,920 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)|
|=||(8013 / 46009)||/||(7315 / 42840)|
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)|
|=||(2159 / 42840)||/||(2665 / 46009)|
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 - (15763 + 22567) / 83166)||/||(1 - (14322 + 21671) / 80642)|
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))|
|=||(2016 / (2016 + 21671))||/||(2239 / (2239 + 22567))|
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)|
|=||(0 / 46009)||/||(0 / 42840)|
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)|
|=||((11714 + 15696) / 83166)||/||((19920 + 14498) / 80642)|
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|
|=||(6594 - 856||-||9520)||/||83166|
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.
Walt Disney Co has a M-score of signals that the company is likely to 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
Walt Disney Co Annual Data
Walt Disney Co Quarterly Data