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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 Fomento Economico Mexicano SAB de CV was -1.25. The lowest was -3.03. And the median was -2.55.
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 Fomento Economico Mexicano SAB de CV 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 * 0.5857||+||0.528 * 1.0552||+||0.404 * 1.0152||+||0.892 * 1.4456||+||0.115 * 0.6599|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.976||+||4.679 * -0.047||-||0.327 * 1.3645|
|This Year (Sep14) TTM:||Last Year (Sep13) TTM:|
|Accounts Receivable was $653 Mil.|
Revenue was 3156.37984438 + 5461.01037466 + 4868.33927083 + 11403.5357417 = $24,889 Mil.
Gross Profit was 1479.56485609 + 2290.73669304 + 2009.47472144 + 4469.02382782 = $10,249 Mil.
Total Current Assets was $3,549 Mil.
Total Assets was $16,613 Mil.
Property, Plant and Equipment(Net PPE) was $3,875 Mil.
Depreciation, Depletion and Amortization(DDA) was $745 Mil.
Selling, General & Admin. Expense(SGA) was $7,483 Mil.
Total Current Liabilities was $2,709 Mil.
Long-Term Debt was $4,526 Mil.
Net Income was 252.549671376 + 232.275344026 + 188.584855605 + 586.471944658 = $1,260 Mil.
Non Operating Income was -74.9414519906 + -32.7094172336 + 0.227393314637 + -62.4903920061 = $-170 Mil.
Cash Flow from Operations was 0 + 0 + 0 + 2210.45349731 = $2,210 Mil.
|Accounts Receivable was $772 Mil.
Revenue was 2872.00306396 + 4786.09996915 + 4496.24 + 5062.65060241 = $17,217 Mil.
Gross Profit was 1346.22749904 + 2030.62326442 + 1860.4 + 2243.52895453 = $7,481 Mil.
Total Current Assets was $6,807 Mil.
Total Assets was $26,266 Mil.
Property, Plant and Equipment(Net PPE) was $5,149 Mil.
Depreciation, Depletion and Amortization(DDA) was $613 Mil.
Selling, General & Admin. Expense(SGA) was $5,303 Mil.
Total Current Liabilities was $4,475 Mil.
Long-Term Debt was $3,908 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)|
|=||(653.244692906 / 24889.2652316)||/||(771.505170433 / 17216.9936355)|
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)|
|=||(2290.73669304 / 17216.9936355)||/||(1479.56485609 / 24889.2652316)|
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 - (3549.36919242 + 3875.04721614) / 16612.5254967)||/||(1 - (6807.04710839 + 5148.75526618) / 26266.4113367)|
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))|
|=||(613.291877186 / (613.291877186 + 5148.75526618))||/||(745.272867025 / (745.272867025 + 3875.04721614))|
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)|
|=||(7482.54176244 / 24889.2652316)||/||(5303.26293432 / 17216.9936355)|
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)|
|=||((4526.25217194 + 2708.84641535) / 16612.5254967)||/||((3908.31099196 + 4475.37342015) / 26266.4113367)|
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|
|=||(1259.88181566 - -169.913867916||-||2210.45349731)||/||16612.5254967|
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.
Fomento Economico Mexicano SAB de CV has a M-score of -2.80 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
Fomento Economico Mexicano SAB de CV Annual Data
Fomento Economico Mexicano SAB de CV Quarterly Data