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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.
Jarden Corp has a M-score of -2.55 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Jarden Corp was 0.08. The lowest was -3.27. And the median was -2.50.
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 Jarden 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 * 0.9137||+||0.528 * 0.9868||+||0.404 * 1.1493||+||0.892 * 1.107||+||0.115 * 1.1175|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0104||+||4.679 * -0.0376||-||0.327 * 0.9145|
|This Year (Mar14) TTM:||Last Year (Mar13) TTM:|
|Accounts Receivable was $1,251 Mil.|
Revenue was 1731.8 + 2215.6 + 1800.8 + 1758.8 = $7,507 Mil.
Gross Profit was 514.4 + 634.5 + 523.2 + 513.5 = $2,186 Mil.
Total Current Assets was $4,495 Mil.
Total Assets was $10,528 Mil.
Property, Plant and Equipment(Net PPE) was $855 Mil.
Depreciation, Depletion and Amortization(DDA) was $174 Mil.
Selling, General & Admin. Expense(SGA) was $1,584 Mil.
Total Current Liabilities was $1,972 Mil.
Long-Term Debt was $4,522 Mil.
Net Income was 3.7 + 37 + 94.9 + 76.4 = $212 Mil.
Non Operating Income was 0 + 0 + 0 + -8.8 = $-9 Mil.
Cash Flow from Operations was -258.1 + 605.3 + 104.6 + 164.8 = $617 Mil.
|Accounts Receivable was $1,237 Mil.
Revenue was 1580.7 + 1819.2 + 1705.9 + 1675.6 = $6,781 Mil.
Gross Profit was 443.5 + 507.4 + 501 + 496.4 = $1,948 Mil.
Total Current Assets was $3,617 Mil.
Total Assets was $7,485 Mil.
Property, Plant and Equipment(Net PPE) was $664 Mil.
Depreciation, Depletion and Amortization(DDA) was $155 Mil.
Selling, General & Admin. Expense(SGA) was $1,416 Mil.
Total Current Liabilities was $1,702 Mil.
Long-Term Debt was $3,346 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)|
|=||(1251 / 7507)||/||(1236.8 / 6781.4)|
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)|
|=||(634.5 / 6781.4)||/||(514.4 / 7507)|
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 - (4494.5 + 854.8) / 10528.2)||/||(1 - (3616.9 + 664.2) / 7484.7)|
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))|
|=||(154.6 / (154.6 + 664.2))||/||(173.8 / (173.8 + 854.8))|
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)|
|=||(1584.1 / 7507)||/||(1416.2 / 6781.4)|
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)|
|=||((4521.9 + 1972.2) / 10528.2)||/||((3346.2 + 1702.4) / 7484.7)|
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|
|=||(212 - -8.8||-||616.6)||/||10528.2|
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.
Jarden Corp has a M-score of -2.55 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
Jarden Corp Annual Data
Jarden Corp Quarterly Data