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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.
Starbucks Corp has a M-score of -2.48 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Starbucks Corp was -1.57. The lowest was -10.87. And the median was -2.73.
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 Starbucks Corp 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 * 1.0349||+||0.528 * 0.9447||+||0.404 * 1.7374||+||0.892 * 1.0684||+||0.115 * 0.9863|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.96||+||4.679 * -0.0467||-||0.327 * 1.4471|
|This Year (Jun14) TTM:||Last Year (Jun13) TTM:|
|Accounts Receivable was €428 Mil.|
Revenue was 3060.94325718 + 2805.06879073 + 3112.7753304 + 2796.26099707 = €11,775 Mil.
Gross Profit was 932.719233604 + 803.837798697 + 932.01174743 + 811.217008798 = €3,480 Mil.
Total Current Assets was €2,474 Mil.
Total Assets was €7,653 Mil.
Property, Plant and Equipment(Net PPE) was €2,486 Mil.
Depreciation, Depletion and Amortization(DDA) was €535 Mil.
Selling, General & Admin. Expense(SGA) was €717 Mil.
Total Current Liabilities was €2,125 Mil.
Long-Term Debt was €1,509 Mil.
Net Income was 377.745025792 + 309.196234613 + 396.989720999 + -903.225806452 = €181 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = €0 Mil.
Cash Flow from Operations was 626.45541636 + 302.968863143 + -1029.29515419 + 638.196480938 = €538 Mil.
|Accounts Receivable was €387 Mil.
Revenue was 2853.55233002 + 2722.08588957 + 2852.03007519 + 2593.75481881 = €11,021 Mil.
Gross Profit was 804.889228419 + 752.147239264 + 814.285714286 + 705.551272167 = €3,077 Mil.
Total Current Assets was €3,239 Mil.
Total Assets was €6,923 Mil.
Property, Plant and Equipment(Net PPE) was €2,282 Mil.
Depreciation, Depletion and Amortization(DDA) was €483 Mil.
Selling, General & Admin. Expense(SGA) was €699 Mil.
Total Current Liabilities was €1,852 Mil.
Long-Term Debt was €420 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)|
|=||(428.076639646 / 11775.0483754)||/||(387.165775401 / 11021.4231136)|
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)|
|=||(803.837798697 / 11021.4231136)||/||(932.719233604 / 11775.0483754)|
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 - (2473.76565954 + 2486.1459101) / 7653.13190862)||/||(1 - (3238.88464477 + 2281.97097021) / 6923.14744079)|
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))|
|=||(482.625929192 / (482.625929192 + 2281.97097021))||/||(534.660761854 / (534.660761854 + 2486.1459101))|
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)|
|=||(716.703927501 / 11775.0483754)||/||(698.783082744 / 11021.4231136)|
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)|
|=||((1509.28518791 + 2125.20265291) / 7653.13190862)||/||((419.938884645 + 1852.10084034) / 6923.14744079)|
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|
|=||(180.705174952 - 0||-||538.325606256)||/||7653.13190862|
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.
Starbucks Corp has a M-score of -2.48 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
Starbucks Corp Annual Data
Starbucks Corp Quarterly Data