Switch to:
Discovery Communications Inc (NAS:DISCK)
Beneish M-Score
-2.50 (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 -2.50 suggests that the company is not a manipulator.

DISCK' s 10-Year Beneish M-Score Range
Min: -7.17   Max: 4.99
Current: -2.5

-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 -2.43.


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 * 0.9099+0.528 * 1.0449+0.404 * 1.0047+0.892 * 1.0846+0.115 * 0.9487
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9515+4.679 * -0.0055-0.327 * 1.0438
=-2.50

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
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.
Net Income was 286 + 250 + 250 + 280 = $1,066 Mil.
Non Operating Income was -52 + -18 + -31 + 14 = $-87 Mil.
Cash Flow from Operations was 331 + 63 + 425 + 420 = $1,239 Mil.
Accounts Receivable was $1,525 Mil.
Revenue was 1610 + 1411 + 1537 + 1375 = $5,933 Mil.
Gross Profit was 1095 + 929 + 1062 + 940 = $4,026 Mil.
Total Current Assets was $2,571 Mil.
Total Assets was $16,105 Mil.
Property, Plant and Equipment(Net PPE) was $538 Mil.
Depreciation, Depletion and Amortization(DDA) was $324 Mil.
Selling, General & Admin. Expense(SGA) was $1,654 Mil.
Total Current Liabilities was $2,360 Mil.
Long-Term Debt was $6,045 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)
=(1505 / 6435) / (1525 / 5933)
=0.23387723 / 0.25703691
=0.9099

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)
=(972 / 5933) / (1090 / 6435)
=0.67857745 / 0.64941725
=1.0449

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 - (2468 + 509) / 15729) / (1 - (2571 + 538) / 16105)
=0.81073177 / 0.80695436
=1.0047

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
=6435 / 5933
=1.0846

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))
=(324 / (324 + 538)) / (334 / (334 + 509))
=0.37587007 / 0.39620403
=0.9487

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)
=(1707 / 6435) / (1654 / 5933)
=0.26526807 / 0.27877971
=0.9515

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)
=((6856 + 1712) / 15729) / ((6045 + 2360) / 16105)
=0.5447263 / 0.52188761
=1.0438

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
=(1066 - -87 - 1239) / 15729
=-0.0055

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 -2.50 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.80961.10230.61581.72181.03651.01121.05281.00740.98360.9234
GMI 1.11031.05271.61560.29961.00640.96071.01230.98531.04851.0513
AQI 0.96671.01241.04190.91540.94580.99540.94770.99311.06051.0063
SGI 1.10030.99060.110545.30261.00441.07171.12471.07651.23361.1319
DEPI 1.00481.17850.20922.51751.34641.10551.04031.03140.66320.9377
SGAI 1.00931.05071.12521.11871.06080.92210.88691.02411.00340.9354
LVGI 0.79251.34440.984420.52040.92221.02741.04781.14271.091.0405
TATA -0.0234-0.0244-0.0467-0.0196-0.00970.01880.0054-0.0052-0.0185-0.0121
M-score -2.56-2.58-3.6130.98-2.45-2.32-2.30-2.49-2.39-2.47

Discovery Communications Inc Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 1.02881.03511.05270.98360.91960.94540.92430.92340.96680.9099
GMI 0.9921.00681.03151.04851.05641.05161.04451.05131.0451.0449
AQI 0.91131.13061.09931.06051.13140.99081.00271.00631.02891.0047
SGI 1.05071.11421.18321.23361.27031.21111.17851.13191.10381.0846
DEPI 1.00610.92730.77570.66320.62290.70550.80210.93771.01410.9487
SGAI 1.04921.04751.02121.00340.96110.95370.95430.93540.92860.9515
LVGI 1.25331.09071.07731.091.02281.02791.03681.04051.04731.0438
TATA -0.0013-0.0155-0.0194-0.0185-0.0232-0.0119-0.0079-0.01210.0012-0.0055
M-score -2.55-2.41-2.36-2.39-2.38-2.41-2.43-2.47-2.38-2.50
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GuruFocus Premium Plus Membership

FEEDBACK