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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 -2.00. The lowest was -3.04. And the median was -2.63.
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 * 0.9444||+||0.528 * 0.9994||+||0.404 * 1.0049||+||0.892 * 1.0157||+||0.115 * 0.9676|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9961||+||4.679 * -0.0385||-||0.327 * 1.0569|
|This Year (Dec16) TTM:||Last Year (Dec15) TTM:|
|Accounts Receivable was $9,878 Mil.|
Revenue was 14784 + 13142 + 14277 + 12969 = $55,172 Mil.
Gross Profit was 6378 + 5837 + 7076 + 6105 = $25,396 Mil.
Total Current Assets was $16,665 Mil.
Total Assets was $91,576 Mil.
Property, Plant and Equipment(Net PPE) was $27,054 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,607 Mil.
Selling, General & Admin. Expense(SGA) was $8,714 Mil.
Total Current Liabilities was $19,317 Mil.
Long-Term Debt was $14,792 Mil.
Net Income was 2479 + 1771 + 2597 + 2143 = $8,990 Mil.
Non Operating Income was 118 + 119 + 108 + 150 = $495 Mil.
Cash Flow from Operations was 1260 + 3827 + 3624 + 3306 = $12,017 Mil.
|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.
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)|
|=||(9878 / 55172)||/||(10298 / 54318)|
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)|
|=||(24987 / 54318)||/||(25396 / 55172)|
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 - (16665 + 27054) / 91576)||/||(1 - (17768 + 25487) / 90121)|
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))|
|=||(2369 / (2369 + 25487))||/||(2607 / (2607 + 27054))|
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)|
|=||(8714 / 55172)||/||(8613 / 54318)|
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)|
|=||((14792 + 19317) / 91576)||/||((12965 + 18796) / 90121)|
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|
|=||(8990 - 495||-||12017)||/||91576|
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 -2.72 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