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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 DeVry Education Group Inc was -1.21. The lowest was -3.36. And the median was -2.66.
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 DeVry Education Group 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 * 0.7573||+||0.528 * 1.0295||+||0.404 * 0.9564||+||0.892 * 1.0011||+||0.115 * 1.0103|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9335||+||4.679 * -0.0452||-||0.327 * 0.8282|
|This Year (Dec14) TTM:||Last Year (Dec13) TTM:|
|Accounts Receivable was $89 Mil.|
Revenue was 484.88 + 462.044 + 485.073 + 496.117 = $1,928 Mil.
Gross Profit was 234.071 + 215.713 + 229 + 253.486 = $932 Mil.
Total Current Assets was $573 Mil.
Total Assets was $1,968 Mil.
Property, Plant and Equipment(Net PPE) was $543 Mil.
Depreciation, Depletion and Amortization(DDA) was $88 Mil.
Selling, General & Admin. Expense(SGA) was $706 Mil.
Total Current Liabilities was $265 Mil.
Long-Term Debt was $0 Mil.
Net Income was 42.413 + 20.44 + 37.484 + 55.525 = $156 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was -48.754 + 141.063 + 2.352 + 150.088 = $245 Mil.
|Accounts Receivable was $118 Mil.
Revenue was 491.269 + 450.913 + 479.964 + 503.825 = $1,926 Mil.
Gross Profit was 248.272 + 209.176 + 234.266 + 266.997 = $959 Mil.
Total Current Assets was $476 Mil.
Total Assets was $1,889 Mil.
Property, Plant and Equipment(Net PPE) was $558 Mil.
Depreciation, Depletion and Amortization(DDA) was $92 Mil.
Selling, General & Admin. Expense(SGA) was $756 Mil.
Total Current Liabilities was $307 Mil.
Long-Term Debt was $0 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)|
|=||(89.318 / 1928.114)||/||(117.812 / 1925.971)|
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)|
|=||(215.713 / 1925.971)||/||(234.071 / 1928.114)|
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 - (572.779 + 542.989) / 1967.866)||/||(1 - (475.745 + 558.043) / 1889.113)|
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))|
|=||(91.698 / (91.698 + 558.043))||/||(88.163 / (88.163 + 542.989))|
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)|
|=||(706.331 / 1928.114)||/||(755.826 / 1925.971)|
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)|
|=||((0 + 264.98) / 1967.866)||/||((0 + 307.152) / 1889.113)|
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|
|=||(155.862 - 0||-||244.749)||/||1967.866|
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.
DeVry Education Group Inc has a M-score of -2.85 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
DeVry Education Group Inc Annual Data
DeVry Education Group Inc Quarterly Data