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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 Walt Disney Co was -1.04. The lowest was -2.86. And the median was -2.50.
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|
|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
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)|
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)|
|=||(6157 / 49895)||/||(6621 / 54318)|
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 - (17768 + 25487) / 90121)||/||(1 - (17240 + 23660) / 87035)|
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))|
|=||(2319 / (2319 + 23660))||/||(2369 / (2369 + 25487))|
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)|
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)|
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|
|=||(9080 - 942||-||11416)||/||90121|
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.
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