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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 -3.10 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 * 0.8486+0.528 * 0.9919+0.404 * 1.0152+0.892 * 0.9751+0.115 * 0.6637
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0079+4.679 * -0.0645-0.327 * 1.3645
=-3.10

* 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 $641 Mil.
Revenue was 3099.59568233 + 5461.7670151 + 4915.2827734 + 5557.40432612 = $19,034 Mil.
Gross Profit was 1452.94706777 + 2291.05408193 + 2028.85130481 + 2408.33459386 = $8,181 Mil.
Total Current Assets was $3,486 Mil.
Total Assets was $16,314 Mil.
Property, Plant and Equipment(Net PPE) was $3,805 Mil.
Depreciation, Depletion and Amortization(DDA) was $733 Mil.
Selling, General & Admin. Expense(SGA) was $5,845 Mil.
Total Current Liabilities was $2,660 Mil.
Long-Term Debt was $4,445 Mil.
Net Income was 248.006231685 + 232.307526518 + 190.403306038 + 53.3202238693 = $724 Mil.
Non Operating Income was -73.5932341704 + -32.713949228 + 0.229585979949 + -293.22341552 = $-399 Mil.
Cash Flow from Operations was 0 + 0 + 0 + 2175.01134473 = $2,175 Mil.
Accounts Receivable was $775 Mil.
Revenue was 4924.33805419 + 4861.85550854 + 4604.53875143 + 5130.04095778 = $19,521 Mil.
Gross Profit was 2081.04987685 + 2062.76445698 + 1905.21055219 + 2273.39319471 = $8,322 Mil.
Total Current Assets was $6,840 Mil.
Total Assets was $26,394 Mil.
Property, Plant and Equipment(Net PPE) was $5,174 Mil.
Depreciation, Depletion and Amortization(DDA) was $621 Mil.
Selling, General & Admin. Expense(SGA) was $5,948 Mil.
Total Current Liabilities was $4,497 Mil.
Long-Term Debt was $3,927 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)
=(641.492636967 / 19034.049797) / (775.246305419 / 19520.7732719)
=0.03370237 / 0.03971391
=0.8486

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)
=(2291.05408193 / 19520.7732719) / (1452.94706777 / 19034.049797)
=0.4263365 / 0.42981852
=0.9919

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 - (3485.51504136 + 3805.33402574) / 16313.661486) / (1 - (6840.05541872 + 5173.72229064) / 26393.7807882)
=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
=19034.049797 / 19520.7732719
=0.9751

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 + 5173.72229064)) / (733.32324913 / (733.32324913 + 3805.33402574))
=0.10723667 / 0.16157273
=0.6637

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)
=(5845.44754205 / 19034.049797) / (5948.07642658 / 19520.7732719)
=0.30710477 / 0.30470496
=1.0079

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)
=((4444.82362105 + 2660.11350569) / 16313.661486) / ((3927.26293103 + 4497.07512315) / 26393.7807882)
=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
=(724.03728811 - -399.301012938 - 2175.01134473) / 16313.661486
=-0.0645

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 -3.10 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.

Fomento Economico Mexicano SAB de CV Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.84991.0271.11881.14881.01010.92990.76220.84990.78721.1235
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 -2.80-2.55-2.53-2.43-2.85-2.67-2.08-2.70-2.72-2.55

Fomento Economico Mexicano SAB de CV Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 1.04891.12340.8480.99220.90150.92871.07381.07441.25720.8486
GMI 0.99350.98690.98290.9820.9820.98881.00281.0061.01150.9919
AQI 0.98120.98040.90821.00650.96690.97081.09791.03541.05631.0152
SGI 1.11181.14211.14841.14651.14911.11081.08821.07651.08510.9751
DEPI 1.05441.19220.96170.93820.92270.92770.97890.96370.98910.6637
SGAI 1.03971.05041.05051.03811.02311.0181.02381.01861.00831.0079
LVGI 0.98551.00071.1431.10831.25821.31991.30051.21541.11271.3645
TATA -0.00220.024-0.0324-0.0334-0.0313-0.0278-0.0336-0.0338-0.0337-0.0645
M-score -2.35-2.13-2.75-2.57-2.70-2.71-2.55-2.56-2.34-3.10
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