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Directv (NAS:DTV)
Beneish M-Score
-3.10 (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.

Directv has a M-score of -3.10 suggests that the company is not a manipulator.

DTV' s 10-Year Beneish M-Score Range
Min: -3.63   Max: 0.15
Current: -3.1

-3.63
0.15

During the past 13 years, the highest Beneish M-Score of Directv was 0.15. The lowest was -3.63. And the median was -2.96.


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 Directv 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 * 1.0132+0.528 * 1.0189+0.404 * 0.9117+0.892 * 1.0474+0.115 * 0.9992
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.968+4.679 * -0.1477-0.327 * 0.8873
=-3.10

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was $2,635 Mil.
Revenue was 8143 + 8922 + 8374 + 8109 = $33,548 Mil.
Gross Profit was 3869 + 3900 + 3926 + 3930 = $15,625 Mil.
Total Current Assets was $8,046 Mil.
Total Assets was $24,301 Mil.
Property, Plant and Equipment(Net PPE) was $9,500 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,959 Mil.
Selling, General & Admin. Expense(SGA) was $6,480 Mil.
Total Current Liabilities was $7,564 Mil.
Long-Term Debt was $17,058 Mil.
Net Income was 730 + 778 + 611 + 806 = $2,925 Mil.
Non Operating Income was 7 + 57 + 1 + 35 = $100 Mil.
Cash Flow from Operations was 1636 + 1643 + 1662 + 1474 = $6,415 Mil.
Accounts Receivable was $2,483 Mil.
Revenue was 7855 + 8594 + 7880 + 7700 = $32,029 Mil.
Gross Profit was 3824 + 3843 + 3758 + 3774 = $15,199 Mil.
Total Current Assets was $6,449 Mil.
Total Assets was $22,520 Mil.
Property, Plant and Equipment(Net PPE) was $9,205 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,864 Mil.
Selling, General & Admin. Expense(SGA) was $6,391 Mil.
Total Current Liabilities was $7,378 Mil.
Long-Term Debt was $18,338 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)
=(2635 / 33548) / (2483 / 32029)
=0.07854418 / 0.07752349
=1.0132

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)
=(3900 / 32029) / (3869 / 33548)
=0.4745387 / 0.46575057
=1.0189

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 - (8046 + 9500) / 24301) / (1 - (6449 + 9205) / 22520)
=0.2779721 / 0.30488455
=0.9117

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
=33548 / 32029
=1.0474

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))
=(2864 / (2864 + 9205)) / (2959 / (2959 + 9500))
=0.23730218 / 0.237499
=0.9992

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)
=(6480 / 33548) / (6391 / 32029)
=0.19315607 / 0.19953792
=0.968

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)
=((17058 + 7564) / 24301) / ((18338 + 7378) / 22520)
=1.01320933 / 1.14191829
=0.8873

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
=(2925 - 100 - 6415) / 24301
=-0.1477

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.

Directv has a M-score of -3.10 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.

Directv Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.97041.16160.97650.81181.04281.10181.09450.99760.88481.0496
GMI 0.25361.20261.00350.97691.00340.99081.02121.02371.00051.016
AQI 0.86320.980.99730.87541.04221.05720.93960.87790.97090.8659
SGI 1.15891.12091.16871.14191.09511.11761.12961.09231.06771.0474
DEPI 1.09211.15240.88150.8550.86341.06891.12881.06680.95031.022
SGAI 2.37130.99380.9180.48362.11210.43950.98311.02242.06091.0049
LVGI 1.11921.12041.00761.32321.17111.23631.14591.1181.02530.9169
TATA -0.0522-0.1178-0.1474-0.1478-0.166-0.1705-0.1385-0.1374-0.1662-0.1478
M-score -3.32-2.70-3.04-3.31-3.38-3.03-2.97-3.11-3.51-3.10

Directv Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 0.99761.11331.0310.91360.88480.8860.90850.93211.04961.0132
GMI 1.02371.0191.01881.00361.00051.00371.00281.01241.0161.0189
AQI 0.87791.01390.90841.00750.97090.97661.02530.93240.86590.9117
SGI 1.09231.0831.0761.07081.06771.0581.05491.0551.04741.0474
DEPI 1.06681.02310.97670.97390.95030.95610.99970.98591.0220.9992
SGAI 1.02241.05030.81960.8291.82721.73442.17842.17960.99790.968
LVGI 1.1181.11921.07831.07491.02531.00720.99160.94240.91690.8873
TATA -0.1374-0.1277-0.1382-0.1456-0.1662-0.1706-0.1721-0.1846-0.1478-0.1477
M-score -3.11-2.93-3.05-3.17-3.47-3.47-3.51-3.56-3.10-3.10
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