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Fomento Economico Mexicano SAB de CV (NYSE:FMX)
Beneish M-Score
-2.34 (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 -2.34 suggests that the company is not a manipulator.

FMX' s 10-Year Beneish M-Score Range
Min: -3.14   Max: -1.34
Current: -2.34

-3.14
-1.34

During the past 13 years, the highest Beneish M-Score of Fomento Economico Mexicano SAB de CV was -1.34. The lowest was -3.14. And the median was -2.56.


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 * 1.2572+0.528 * 1.0115+0.404 * 1.0563+0.892 * 1.0851+0.115 * 0.9892
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0083+4.679 * -0.0337-0.327 * 1.1127
=-2.34

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $944 Mil.
Revenue was 5461.9351859 + 4915.2827734 + 5557.40432612 + 4924.33805419 = $20,859 Mil.
Gross Profit was 2291.12462474 + 2028.85130481 + 2408.33459386 + 2081.04987685 = $8,809 Mil.
Total Current Assets was $6,117 Mil.
Total Assets was $28,096 Mil.
Property, Plant and Equipment(Net PPE) was $5,728 Mil.
Depreciation, Depletion and Amortization(DDA) was $733 Mil.
Selling, General & Admin. Expense(SGA) was $6,374 Mil.
Total Current Liabilities was $3,997 Mil.
Long-Term Debt was $5,680 Mil.
Net Income was 232.314679393 + 190.403306038 + 53.3202238693 + 469.981527094 = $946 Mil.
Non Operating Income was -32.7149565084 + 0.229585979949 + -293.22341552 + 44.7967980296 = $-281 Mil.
Cash Flow from Operations was 0 + 0 + 2175.01134473 + 0 = $2,175 Mil.
Accounts Receivable was $692 Mil.
Revenue was 4861.85550854 + 4604.53875143 + 5130.04095778 + 4626.68630795 = $19,223 Mil.
Gross Profit was 2062.76445698 + 1905.21055219 + 2273.39319471 + 1970.61559932 = $8,212 Mil.
Total Current Assets was $6,537 Mil.
Total Assets was $25,308 Mil.
Property, Plant and Equipment(Net PPE) was $4,915 Mil.
Depreciation, Depletion and Amortization(DDA) was $621 Mil.
Selling, General & Admin. Expense(SGA) was $5,826 Mil.
Total Current Liabilities was $4,350 Mil.
Long-Term Debt was $3,484 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)
=(944.42306212 / 20858.9603396) / (692.289609779 / 19223.1215257)
=0.04527661 / 0.03601338
=1.2572

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)
=(2028.85130481 / 19223.1215257) / (2291.12462474 / 20858.9603396)
=0.42719304 / 0.42232979
=1.0115

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 - (6117.23500885 + 5728.4273728) / 28095.527673) / (1 - (6536.67136812 + 4914.511832) / 25308.1021783)
=0.57837907 / 0.54752896
=1.0563

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
=20858.9603396 / 19223.1215257
=1.0851

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))
=(621.45557656 / (621.45557656 + 4914.511832)) / (733.32324913 / (733.32324913 + 5728.4273728))
=0.11225781 / 0.11348678
=0.9892

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)
=(6374.21362447 / 20858.9603396) / (5825.91979759 / 19223.1215257)
=0.30558635 / 0.30306835
=1.0083

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)
=((5679.85528443 + 3996.8439689) / 28095.527673) / ((3483.54489892 + 4350.18022254) / 25308.1021783)
=0.34442134 / 0.30953428
=1.1127

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
=(946.019736394 - -280.911988018 - 2175.01134473) / 28095.527673
=-0.0337

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 -2.34 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 0.84991.0271.31111.15941.08840.94050.91720.96451.05781.2291
GMI 1.02791.00091.0111.00430.99711.00211.10240.99860.98521.0005
AQI 1.14291.00981.04530.96410.97671.00171.29170.99890.90821.0979
SGI 1.20281.19851.15311.16890.89761.2710.90971.08431.23721.0399
DEPI 0.87340.950.97351.61640.71270.94691.01081.11160.96170.9789
SGAI 0.99970.99421.01571.00760.99820.99070.88121.0031.051.0251
LVGI 1.03250.79421.04170.94291.06710.92570.61770.96741.1431.3005
TATA -0.0877-0.0728-0.0651-0.0669-0.0482-0.08340.0808-0.0383-0.0327-0.0326
M-score -2.80-2.55-2.36-2.42-2.78-2.66-1.94-2.59-2.47-2.45

Fomento Economico Mexicano SAB de CV Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.9911.04891.12341.13950.99220.90150.92871.17471.07441.2572
GMI 0.99820.99350.98690.98290.9820.9820.98881.00281.0061.0115
AQI 0.96010.98120.98040.90821.00650.96690.97081.09791.03541.0563
SGI 1.15821.11181.14211.14841.14651.14911.11081.08821.07651.0851
DEPI 1.06441.05441.19220.96170.93820.92270.92770.97890.96370.9892
SGAI 1.01661.03971.05041.05051.03811.02311.0181.02381.01861.0083
LVGI 1.02650.98551.00071.1431.10831.25821.31991.30051.21541.1127
TATA -0.0273-0.00220.024-0.0004-0.0015-0.00190.0004-0.0336-0.0338-0.0337
M-score -2.50-2.35-2.13-2.33-2.42-2.57-2.58-2.46-2.56-2.34
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