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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 -2.57.
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 * 1.0151||+||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|
|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 5677 + 5244 + 12716 + 3004 = $26,641 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
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)|
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)|
|=||(5735 / 47104)||/||(5771 / 50707)|
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 - (15646 + 23762) / 85715)||/||(1 - (15046 + 22681) / 82580)|
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))|
|=||(2269 / (2269 + 22681))||/||(2323 / (2323 + 23762))|
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)|
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)|
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|
|=||(8034 - 816||-||10814)||/||85715|
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 -2.57 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