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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 -2.42 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 * 1.0062||+||0.528 * 0.9801||+||0.404 * 1.4769||+||0.892 * 1.0647||+||0.115 * 0.7306|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9826||+||4.679 * -0.0048||-||0.327 * 1.4282|
|This Year (Mar14) TTM:||Last Year (Mar13) TTM:|
|Accounts Receivable was €427 Mil.|
Revenue was 2805.06879073 + 3112.7753304 + 2782.25806452 + 2858.44155844 = €11,559 Mil.
Gross Profit was 723.533671253 + 1794.78707783 + 1584.53079179 + 1637.96791444 = €5,741 Mil.
Total Current Assets was €2,592 Mil.
Total Assets was €7,311 Mil.
Property, Plant and Equipment(Net PPE) was €2,374 Mil.
Depreciation, Depletion and Amortization(DDA) was €766 Mil.
Selling, General & Admin. Expense(SGA) was €3,187 Mil.
Total Current Liabilities was €1,979 Mil.
Long-Term Debt was €1,483 Mil.
Net Income was 309.196234613 + 396.989720999 + 352.712609971 + 319.174942704 = €1,378 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = €0 Mil.
Cash Flow from Operations was 302.968863143 + -1029.29515419 + 1631.4516129 + 508.250572956 = €1,413 Mil.
|Accounts Receivable was €399 Mil.
Revenue was 2722.08588957 + 2852.03007519 + 2593.75481881 + 2688.03905614 = €10,856 Mil.
Gross Profit was 671.012269939 + 1633.45864662 + 1468.69699306 + 1511.3913751 = €5,285 Mil.
Total Current Assets was €2,922 Mil.
Total Assets was €6,521 Mil.
Property, Plant and Equipment(Net PPE) was €2,182 Mil.
Depreciation, Depletion and Amortization(DDA) was €473 Mil.
Selling, General & Admin. Expense(SGA) was €3,046 Mil.
Total Current Liabilities was €1,741 Mil.
Long-Term Debt was €421 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)|
|=||(427.226647357 / 11558.5437441)||/||(398.773006135 / 10855.9098397)|
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)|
|=||(1794.78707783 / 10855.9098397)||/||(723.533671253 / 11558.5437441)|
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 - (2591.60028965 + 2373.71469949) / 7311.3685735)||/||(1 - (2921.93251534 + 2181.97852761) / 6520.55214724)|
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))|
|=||(473.229505484 / (473.229505484 + 2181.97852761))||/||(765.961376049 / (765.961376049 + 2373.71469949))|
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)|
|=||(3187.06586494 / 11558.5437441)||/||(3046.48366654 / 10855.9098397)|
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)|
|=||((1482.9833454 + 1979.36278059) / 7311.3685735)||/||((421.472392638 + 1740.56748466) / 6520.55214724)|
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|
|=||(1378.07350829 - 0||-||1413.37589482)||/||7311.3685735|
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 -2.42 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