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Starwood Hotels & Resorts Worldwide Inc (NYSE:HOT)
Beneish M-Score
-3.03 (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.

Starwood Hotels & Resorts Worldwide Inc has a M-score of -3.03 suggests that the company is not a manipulator.

HOT' s Beneish M-Score Range Over the Past 10 Years
Min: -5.17   Max: -0.97
Current: -3.03

-5.17
-0.97

During the past 13 years, the highest Beneish M-Score of Starwood Hotels & Resorts Worldwide Inc was -0.97. The lowest was -5.17. And the median was -2.57.


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 Starwood Hotels & Resorts Worldwide Inc 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 * 0.9545+0.528 * 0.9719+0.404 * 0.9885+0.892 * 0.9778+0.115 * 0.7061
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0314+4.679 * -0.0821-0.327 * 1.1523
=-3.03

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $630 Mil.
Revenue was 1246 + 1404 + 1433 + 1434 = $5,517 Mil.
Gross Profit was 1030 + 347 + 393 + 380 = $2,150 Mil.
Total Current Assets was $2,353 Mil.
Total Assets was $6,922 Mil.
Property, Plant and Equipment(Net PPE) was $1,478 Mil.
Depreciation, Depletion and Amortization(DDA) was $273 Mil.
Selling, General & Admin. Expense(SGA) was $1,057 Mil.
Total Current Liabilities was $1,978 Mil.
Long-Term Debt was $2,380 Mil.
Net Income was -263 + 90 + 166 + 88 = $81 Mil.
Non Operating Income was -105 + 14 + 41 + -41 = $-91 Mil.
Cash Flow from Operations was 162 + 48 + 199 + 331 = $740 Mil.
Accounts Receivable was $675 Mil.
Revenue was 1241 + 1415 + 1493 + 1493 = $5,642 Mil.
Gross Profit was 992 + 344 + 423 + 378 = $2,137 Mil.
Total Current Assets was $2,095 Mil.
Total Assets was $8,053 Mil.
Property, Plant and Equipment(Net PPE) was $2,320 Mil.
Depreciation, Depletion and Amortization(DDA) was $287 Mil.
Selling, General & Admin. Expense(SGA) was $1,048 Mil.
Total Current Liabilities was $2,408 Mil.
Long-Term Debt was $1,992 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)
=(630 / 5517) / (675 / 5642)
=0.1141925 / 0.11963843
=0.9545

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)
=(2137 / 5642) / (2150 / 5517)
=0.37876639 / 0.38970455
=0.9719

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 - (2353 + 1478) / 6922) / (1 - (2095 + 2320) / 8053)
=0.44654724 / 0.45175711
=0.9885

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
=5517 / 5642
=0.9778

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))
=(287 / (287 + 2320)) / (273 / (273 + 1478))
=0.11008822 / 0.15591091
=0.7061

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)
=(1057 / 5517) / (1048 / 5642)
=0.19158963 / 0.18574973
=1.0314

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)
=((2380 + 1978) / 6922) / ((1992 + 2408) / 8053)
=0.62958682 / 0.54638023
=1.1523

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
=(81 - -91 - 740) / 6922
=-0.0821

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.

Starwood Hotels & Resorts Worldwide Inc has a M-score of -3.03 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 local exchange's currency.

Starwood Hotels & Resorts Worldwide Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.92341.00940.95820.98781.06761.00010.91631.13421.05071.0837
GMI 00.97541.11951.1440.9620.97330.97170.93310.98650.999
AQI 0.81091.04641.05241.03670.94760.93551.08250.99151.00431.0826
SGI 1.00031.02910.93520.81611.07991.10911.12390.96740.97840.9632
DEPI 1.18461.33740.63791.01811.09441.04241.03040.90920.83370.8399
SGAI 1.26981.05030.79361.02051.01450.92260.93521.07281.071.002
LVGI 0.99451.281.07860.89140.9670.87270.86410.94871.47480.941
TATA 0.0523-0.0378-0.0242-0.046-0.0263-0.0154-0.0562-0.0592-0.0409-0.0533
M-score -2.93-2.68-2.64-2.75-2.49-2.43-2.63-2.71-2.84-2.65

Starwood Hotels & Resorts Worldwide Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 1.06081.05241.0411.05071.11331.12371.13591.13081.05560.9545
GMI 0.97180.98341.00150.98650.98250.68120.67170.68460.68150.9719
AQI 1.01971.03641.06431.00431.05251.04581.00191.08261.01230.9885
SGI 0.98190.98720.97620.97840.98440.93860.93110.92310.92790.9778
DEPI 0.8770.93830.88550.83370.83130.75220.76040.83990.85680.7061
SGAI 1.08831.11541.07841.071.03932.77062.8372.80522.80511.0314
LVGI 0.98121.04531.31891.47481.49831.33521.07870.9410.94991.1523
TATA -0.0579-0.0525-0.0496-0.0409-0.0433-0.0483-0.0566-0.0535-0.0508-0.0821
M-score -2.74-2.72-2.80-2.84-2.77-3.24-3.22-3.12-3.20-3.03
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