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Discovery Communications Inc (NAS:DISCK)
Beneish M-Score
-2.47 (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.

Discovery Communications Inc has a M-score of -2.47 suggests that the company is not a manipulator.

DISCK' s Beneish M-Score Range Over the Past 10 Years
Min: -7.17   Max: 4.99
Current: -2.47

-7.17
4.99

During the past 13 years, the highest Beneish M-Score of Discovery Communications Inc was 4.99. The lowest was -7.17. And the median was -2.45.


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 Discovery Communications Inc 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 * 1.0399+0.528 * 1.0345+0.404 * 0.9974+0.892 * 1.0057+0.115 * 0.9492
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9593+4.679 * -0.0045-0.327 * 1.0824
=-2.47

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $1,574 Mil.
Revenue was 1708 + 1561 + 1646 + 1557 = $6,472 Mil.
Gross Profit was 1105 + 969 + 1006 + 983 = $4,063 Mil.
Total Current Assets was $2,548 Mil.
Total Assets was $15,690 Mil.
Property, Plant and Equipment(Net PPE) was $455 Mil.
Depreciation, Depletion and Amortization(DDA) was $326 Mil.
Selling, General & Admin. Expense(SGA) was $1,647 Mil.
Total Current Liabilities was $1,442 Mil.
Long-Term Debt was $7,809 Mil.
Net Income was 408 + 263 + 219 + 279 = $1,169 Mil.
Non Operating Income was 15 + -24 + -16 + -10 = $-35 Mil.
Cash Flow from Operations was 329 + 62 + 625 + 258 = $1,274 Mil.
Accounts Receivable was $1,505 Mil.
Revenue was 1654 + 1537 + 1676 + 1568 = $6,435 Mil.
Gross Profit was 1090 + 972 + 1078 + 1039 = $4,179 Mil.
Total Current Assets was $2,468 Mil.
Total Assets was $15,729 Mil.
Property, Plant and Equipment(Net PPE) was $509 Mil.
Depreciation, Depletion and Amortization(DDA) was $334 Mil.
Selling, General & Admin. Expense(SGA) was $1,707 Mil.
Total Current Liabilities was $1,712 Mil.
Long-Term Debt was $6,856 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)
=(1574 / 6472) / (1505 / 6435)
=0.24320148 / 0.23387723
=1.0399

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)
=(4179 / 6435) / (4063 / 6472)
=0.64941725 / 0.62778121
=1.0345

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 - (2548 + 455) / 15690) / (1 - (2468 + 509) / 15729)
=0.80860421 / 0.81073177
=0.9974

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
=6472 / 6435
=1.0057

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))
=(334 / (334 + 509)) / (326 / (326 + 455))
=0.39620403 / 0.41741357
=0.9492

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)
=(1647 / 6472) / (1707 / 6435)
=0.25448084 / 0.26526807
=0.9593

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)
=((7809 + 1442) / 15690) / ((6856 + 1712) / 15729)
=0.58961122 / 0.5447263
=1.0824

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
=(1169 - -35 - 1274) / 15690
=-0.0045

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.

Discovery Communications Inc has a M-score of -2.47 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.

Discovery Communications Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.10230.61581.72181.03651.01121.05281.00740.98360.92341.0113
GMI 1.05271.61560.29961.00640.96071.01230.98531.04851.05131.0433
AQI 1.01241.04190.91540.94580.99540.94770.99311.06051.00560.9954
SGI 0.99060.110545.30261.00441.07171.12471.07651.23361.13191.0206
DEPI 1.17850.20922.51751.34641.10551.04031.03140.66320.93770.9236
SGAI 1.05071.12521.11871.06080.92210.88691.02091.00660.93540.9665
LVGI 1.34440.984420.52040.92221.02741.04781.14271.091.03811.0756
TATA -0.0397-0.0469-0.0196-0.00970.01880.0054-0.0049-0.0185-0.0121-0.0093
M-score -2.65-3.6130.98-2.45-2.32-2.30-2.49-2.39-2.47-2.50

Discovery Communications Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 0.91960.94540.92430.92340.96680.90991.11321.01131.05771.0399
GMI 1.05641.05161.04451.05131.0451.04491.04921.04331.0381.0345
AQI 1.13140.99081.00271.00561.02891.00470.98480.99540.99130.9974
SGI 1.27031.21111.17851.13191.10381.08461.04861.02061.00421.0057
DEPI 0.62290.70550.80210.93771.01410.94870.97070.92360.91940.9492
SGAI 0.96390.95640.95680.93540.92860.95150.93840.96650.99220.9593
LVGI 1.02281.02791.03681.03811.04731.04381.06971.07561.05481.0824
TATA -0.0232-0.0119-0.0079-0.01210.0012-0.00550.0062-0.0093-0.008-0.0045
M-score -2.38-2.41-2.43-2.47-2.38-2.50-2.30-2.50-2.47-2.47
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