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Fomento Economico Mexicano SAB de CV (NYSE:FMX)
Beneish M-Score
-3.06 (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.

Fomento Economico Mexicano SAB de CV has a M-score of -3.08 suggests that the company is not a manipulator.

FMX' s 10-Year Beneish M-Score Range
Min: -3.06   Max: -1.25
Current: -3.06

-3.06
-1.25

During the past 13 years, the highest Beneish M-Score of Fomento Economico Mexicano SAB de CV was -1.25. The lowest was -3.06. And the median was -2.61.


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 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 * 0.8517+0.528 * 0.9916+0.404 * 1.0152+0.892 * 0.9942+0.115 * 0.6599
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0078+4.679 * -0.0649-0.327 * 1.3645
=-3.08

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $653 Mil.
Revenue was 3156.37984438 + 5461.01037466 + 4868.33927083 + 5647.9631053 = $19,134 Mil.
Gross Profit was 1479.56485609 + 2290.73669304 + 2009.47472144 + 2447.57878555 = $8,227 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 $5,875 Mil.
Total Current Liabilities was $2,709 Mil.
Long-Term Debt was $4,526 Mil.
Net Income was 252.549671376 + 232.275344026 + 188.584855605 + 54.189085319 = $728 Mil.
Non Operating Income was -74.9414519906 + -32.7094172336 + 0.227393314637 + -298.001537279 = $-405 Mil.
Cash Flow from Operations was 0 + 0 + 0 + 2210.45349731 = $2,210 Mil.
Accounts Receivable was $772 Mil.
Revenue was 4900.57449253 + 4786.09996915 + 4496.24 + 5062.65060241 = $19,246 Mil.
Gross Profit was 2071.00727691 + 2030.62326442 + 1860.4 + 2243.52895453 = $8,206 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 $5,864 Mil.
Total Current Liabilities was $4,475 Mil.
Long-Term Debt was $3,908 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)
=(653.244692906 / 19133.6925952) / (771.505170433 / 19245.5650641)
=0.03414107 / 0.04008743
=0.8517

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)
=(2290.73669304 / 19245.5650641) / (1479.56485609 / 19133.6925952)
=0.42636106 / 0.42999306
=0.9916

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 - (3549.36919242 + 3875.04721614) / 16612.5254967) / (1 - (6807.04710839 + 5148.75526618) / 26266.4113367)
=0.55308322 / 0.54482543
=1.0152

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
=19133.6925952 / 19245.5650641
=0.9942

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))
=0.10643646 / 0.1613033
=0.6599

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)
=(5875.31655107 / 19133.6925952) / (5863.73784815 / 19245.5650641)
=0.30706653 / 0.30467995
=1.0078

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)
=0.43552069 / 0.31917891
=1.3645

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
=(727.598956326 - -405.425013189 - 2210.45349731) / 16612.5254967
=-0.0649

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 -3.08 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.

Fomento Economico Mexicano SAB de CV Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.78051.12021.11691.14881.01410.92630.76220.84990.78721.1235
GMI 1.02311.00671.00981.00430.99711.00211.10240.99860.98521.0005
AQI 1.14281.04561.00960.96410.99130.98691.29170.99890.90821.0979
SGI 1.3571.15031.10741.16450.92371.22330.89411.07621.25671.071
DEPI 0.80740.99841.00211.61640.71270.94691.01081.11160.96170.9789
SGAI 1.00630.9881.01531.00760.99820.99070.88121.0031.051.0251
LVGI 1.03260.79171.04490.94291.05390.93720.61770.96741.1431.3005
TATA -0.0951-0.0713-0.0651-0.0669-0.0613-0.08340.0808-0.0383-0.0327-0.0326
M-score -2.77-2.48-2.59-2.43-2.88-2.73-2.10-2.71-2.70-2.52

Fomento Economico Mexicano SAB de CV Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 1.00311.09560.86060.9670.93160.92791.10281.07181.25840.8517
GMI 0.99390.98720.98310.98140.98150.98851.00241.0061.01140.9916
AQI 0.98120.98040.90821.00650.96690.97081.09791.03541.05631.0152
SGI 1.12881.13621.14951.1221.14011.10861.09111.09461.1010.9942
DEPI 1.03391.1690.96170.88680.93040.91230.97890.95090.97710.6599
SGAI 1.04021.05081.05051.0371.02261.01731.02311.01851.00821.0078
LVGI 0.98551.00071.1431.10831.25821.31991.30051.21541.11271.3645
TATA -0.00230.0243-0.0322-0.034-0.0314-0.0276-0.0346-0.0356-0.035-0.0649
M-score -2.38-2.16-2.73-2.62-2.68-2.71-2.53-2.56-2.33-3.08
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