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Walt Disney Co (NYSE:DIS)
Beneish M-Score
-2.49 (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 -2.49 suggests that the company is not a manipulator.

DIS' s Beneish M-Score Range Over the Past 10 Years
Min: -3.04   Max: -1.04
Current: -2.49

-3.04
-1.04

During the past 13 years, the highest Beneish M-Score of Walt Disney Co was -1.04. The lowest was -3.04. And the median was -2.61.


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 * 1.1011+0.528 * 0.997+0.404 * 0.9811+0.892 * 1.0886+0.115 * 1.0496
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9328+4.679 * -0.0364-0.327 * 1.0588
=-2.49

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $10,298 Mil.
Revenue was 15244 + 13512 + 13101 + 12461 = $54,318 Mil.
Gross Profit was 6621 + 6157 + 6438 + 5771 = $24,987 Mil.
Total Current Assets was $17,768 Mil.
Total Assets was $90,121 Mil.
Property, Plant and Equipment(Net PPE) was $25,487 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,369 Mil.
Selling, General & Admin. Expense(SGA) was $8,613 Mil.
Total Current Liabilities was $18,796 Mil.
Long-Term Debt was $12,965 Mil.
Net Income was 2880 + 1609 + 2483 + 2108 = $9,080 Mil.
Non Operating Income was 393 + 131 + 212 + 206 = $942 Mil.
Cash Flow from Operations was 2362 + 3328 + 2808 + 2918 = $11,416 Mil.
Accounts Receivable was $8,591 Mil.
Revenue was 13391 + 12389 + 12466 + 11649 = $49,895 Mil.
Gross Profit was 5735 + 5370 + 6102 + 5677 = $22,884 Mil.
Total Current Assets was $17,240 Mil.
Total Assets was $87,035 Mil.
Property, Plant and Equipment(Net PPE) was $23,660 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,319 Mil.
Selling, General & Admin. Expense(SGA) was $8,482 Mil.
Total Current Liabilities was $16,804 Mil.
Long-Term Debt was $12,167 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)
=(10298 / 54318) / (8591 / 49895)
=0.18958725 / 0.17218158
=1.1011

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)
=(6157 / 49895) / (6621 / 54318)
=0.45864315 / 0.46001326
=0.997

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 - (17768 + 25487) / 90121) / (1 - (17240 + 23660) / 87035)
=0.52003418 / 0.53007411
=0.9811

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
=54318 / 49895
=1.0886

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))
=(2319 / (2319 + 23660)) / (2369 / (2369 + 25487))
=0.08926441 / 0.08504451
=1.0496

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)
=(8613 / 54318) / (8482 / 49895)
=0.15856622 / 0.16999699
=0.9328

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)
=((12965 + 18796) / 90121) / ((12167 + 16804) / 87035)
=0.35242618 / 0.33286609
=1.0588

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
=(9080 - 942 - 11416) / 90121
=-0.0364

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 -2.49 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

Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14Sep15
DSRI 0.97231.02640.9537
GMI 1.00160.96830.9986
AQI 1.03980.98470.9668
SGI 1.06541.08371.0748
DEPI 0.94790.99891.0445
SGAI 0.98640.94480.9258
LVGI 0.94851.02241.0714
TATA -0.0458-0.0352-0.0373
M-score -2.63-2.57-2.65

Walt Disney Co Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 0.98860.99910.99290.95371.1011
GMI 1.09751.24811.36460.99860.997
AQI 0.98320.99470.97750.96680.9811
SGI 1.08451.07651.06981.07481.0886
DEPI 1.01121.02121.02161.04451.0496
SGAI 3.87581.89811.28560.92580.9328
LVGI 1.010.94590.98421.07141.0588
TATA -0.0373-0.0411-0.036-0.0373-0.0364
M-score -3.04-2.61-2.45-2.65-2.49
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