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Walt Disney Co (NYSE:DIS)
Beneish M-Score
-2.57 (As of Today)

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 -2.88 suggests that the company is not a manipulator.

DIS' s 10-Year Beneish M-Score Range
Min: -2.86   Max: -1.04
Current: -2.57

-2.86
-1.04

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 -2.57.


Definition

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 * 0.9991+0.528 * 0.4118+0.404 * 0.9947+0.892 * 1.0765+0.115 * 1.0212
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9024+4.679 * -0.042-0.327 * 0.9459
=-2.88

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was $8,161 Mil.
Revenue was 12461 + 13391 + 12389 + 12466 = $50,707 Mil.
Gross Profit was 5771 + 5735 + 13249 + 3498 = $28,253 Mil.
Total Current Assets was $15,646 Mil.
Total Assets was $85,715 Mil.
Property, Plant and Equipment(Net PPE) was $23,762 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,323 Mil.
Selling, General & Admin. Expense(SGA) was $4,016 Mil.
Total Current Liabilities was $13,410 Mil.
Long-Term Debt was $12,186 Mil.
Net Income was 2108 + 2182 + 1499 + 2245 = $8,034 Mil.
Non Operating Income was 206 + 212 + 176 + 222 = $816 Mil.
Cash Flow from Operations was 2918 + 1855 + 3105 + 2936 = $10,814 Mil.
Accounts Receivable was $7,588 Mil.
Revenue was 11649 + 12309 + 11568 + 11578 = $47,104 Mil.
Gross Profit was 2981 + 2665 + 2159 + 3004 = $10,809 Mil.
Total Current Assets was $15,046 Mil.
Total Assets was $82,580 Mil.
Property, Plant and Equipment(Net PPE) was $22,681 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,269 Mil.
Selling, General & Admin. Expense(SGA) was $4,134 Mil.
Total Current Liabilities was $15,162 Mil.
Long-Term Debt was $10,909 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(8161 / 50707) / (7588 / 47104)
=0.16094425 / 0.16109035
=0.9991

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.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(5735 / 47104) / (5771 / 50707)
=0.22947096 / 0.55718145
=0.4118

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (15646 + 23762) / 85715) / (1 - (15046 + 22681) / 82580)
=0.54024383 / 0.54314604
=0.9947

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.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=50707 / 47104
=1.0765

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))
=(2269 / (2269 + 22681)) / (2323 / (2323 + 23762))
=0.09094188 / 0.08905501
=1.0212

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)
=(4016 / 50707) / (4134 / 47104)
=0.07920011 / 0.08776325
=0.9024

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)
=((12186 + 13410) / 85715) / ((10909 + 15162) / 82580)
=0.29861751 / 0.31570598
=0.9459

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(8034 - 816 - 10814) / 85715
=-0.042

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 -2.88 suggests that the company will not be a manipulator.


Related Terms

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


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Walt Disney Co Annual Data

Sep05Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14
DSRI 1.0027
GMI 0.4573
AQI 0.985
SGI 1.0837
DEPI 0.9989
SGAI 0.9448
LVGI 1.0123
TATA -0.0368
M-score -2.86

Walt Disney Co Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 0.98860.9991
GMI 0.42690.4118
AQI 0.98320.9947
SGI 1.08451.0765
DEPI 1.01121.0212
SGAI 1.85110.9024
LVGI 1.010.9459
TATA -0.0387-0.042
M-score -3.05-2.88
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