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Fomento Economico Mexicano SAB de CV (NYSE:FMX)
Beneish M-Score
-2.56 (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 -2.33 suggests that the company is not a manipulator.

FMX' s 10-Year Beneish M-Score Range
Min: -3.14   Max: -1.34
Current: -2.56

-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 -2.55.


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 * 1.0744+0.528 * 1.006+0.404 * 1.0354+0.892 * 1.0765+0.115 * 0.9637
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0186+4.679 * 0.016-0.327 * 1.2154
=-2.33

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $867 Mil.
Revenue was 4915.2827734 + 5557.40432612 + 4924.33805419 + 4861.85550854 = $20,259 Mil.
Gross Profit was 2028.85130481 + 2408.33459386 + 2081.04987685 + 2062.76445698 = $8,581 Mil.
Total Current Assets was $5,657 Mil.
Total Assets was $27,368 Mil.
Property, Plant and Equipment(Net PPE) was $5,508 Mil.
Depreciation, Depletion and Amortization(DDA) was $733 Mil.
Selling, General & Admin. Expense(SGA) was $6,234 Mil.
Total Current Liabilities was $3,818 Mil.
Long-Term Debt was $5,665 Mil.
Net Income was 190.403306038 + 53.3202238693 + 469.981527094 + 279.344930262 = $993 Mil.
Non Operating Income was 0.229585979949 + -293.22341552 + 44.7967980296 + -7.5223319229 = $-256 Mil.
Cash Flow from Operations was 0 + 812.10974134 + 0 + 0 = $812 Mil.
Accounts Receivable was $749 Mil.
Revenue was 4604.53875143 + 5130.04095778 + 4626.68630795 + 4458.6950015 = $18,820 Mil.
Gross Profit was 1905.21055219 + 2273.39319471 + 1970.61559932 + 1870.17360072 = $8,019 Mil.
Total Current Assets was $5,144 Mil.
Total Assets was $23,380 Mil.
Property, Plant and Equipment(Net PPE) was $4,868 Mil.
Depreciation, Depletion and Amortization(DDA) was $621 Mil.
Selling, General & Admin. Expense(SGA) was $5,685 Mil.
Total Current Liabilities was $4,485 Mil.
Long-Term Debt was $2,180 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)
=(866.534016989 / 20258.8806622) / (749.221694249 / 18819.9610187)
=0.04277305 / 0.03980995
=1.0744

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)
=(2408.33459386 / 18819.9610187) / (2028.85130481 / 20258.8806622)
=0.42611103 / 0.42356734
=1.006

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 - (5656.76895998 + 5508.30335961) / 27367.5671539) / (1 - (5144.19138129 + 4867.52416844) / 23379.9770605)
=0.59203271 / 0.57178249
=1.0354

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
=20258.8806622 / 18819.9610187
=1.0765

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 + 4867.52416844)) / (733.32324913 / (733.32324913 + 5508.30335961))
=0.11321878 / 0.11748913
=0.9637

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)
=(6233.67153809 / 20258.8806622) / (5685.10486778 / 18819.9610187)
=0.30770069 / 0.30207846
=1.0186

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)
=((5665.18711257 + 3817.5556746) / 27367.5671539) / ((2180.07537277 + 4485.33508111) / 23379.9770605)
=0.34649564 / 0.28509055
=1.2154

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
=(993.049987263 - -255.719363433 - 812.10974134) / 27367.5671539
=0.016

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 -2.33 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 0.78051.31411.11571.15941.09170.79161.03780.96571.1629
GMI 1.02311.00671.00981.00430.99711.08970.99990.9841.0005
AQI 1.14281.04561.00960.96410.99131.29571.00940.94981.0979
SGI 1.30971.1661.08841.16890.89761.03371.07621.24641.0399
DEPI 0.80740.99841.00211.61640.71270.974600.89450.9789
SGAI 1.00630.9881.01531.00760.99820.89331.02311.02941.0251
LVGI 1.03260.79171.04490.94291.05390.75380.96941.08741.3005
TATA -0.0951-0.0713-0.0651-0.0669-0.0613-0.0861-0.0202-0.0334-0.0326
M-score -2.81-2.28-2.61-2.42-2.83-2.78-2.58-2.52-2.51

Fomento Economico Mexicano SAB de CV Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 0.69290.73130.7910.85081.040.98460.89440.92281.11141.0744
GMI 0.99660.99290.98580.97840.98060.97970.98070.98781.00291.006
AQI 1.00940.96010.98120.98040.94981.00650.96690.97081.09791.0354
SGI 1.6121.56961.47431.5081.15741.15541.15831.11791.08821.0765
DEPI 00000.89450.88950.87460.87910.97890.9637
SGAI 1.01391.01831.03291.03151.0171.01011.00061.00111.02381.0186
LVGI 0.96941.02650.98551.00071.08741.10831.25821.31991.30051.2154
TATA 0.0002-0.00120.01670.0411-0.0159-0.0131-0.0096-0.01130.01740.016
M-score -2.32-2.37-2.30-2.11-2.45-2.47-2.60-2.64-2.28-2.33
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