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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.
During the past 13 years, the highest Beneish M-Score of Jarden Corp was 0.12. The lowest was -3.32. And the median was -2.47.
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 * 0.9589||+||0.528 * 0.9501||+||0.404 * 1.4099||+||0.892 * 1.1588||+||0.115 * 1.0411|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0919||+||4.679 * -0.0277||-||0.327 * 1.0052|
|This Year (Sep14) TTM:||Last Year (Sep13) TTM:|
|Accounts Receivable was $1,378 Mil.|
Revenue was 2142.2 + 1975.1 + 1731.8 + 2215.6 = $8,065 Mil.
Gross Profit was 673.3 + 602 + 514.4 + 634.5 = $2,424 Mil.
Total Current Assets was $4,269 Mil.
Total Assets was $10,823 Mil.
Property, Plant and Equipment(Net PPE) was $847 Mil.
Depreciation, Depletion and Amortization(DDA) was $191 Mil.
Selling, General & Admin. Expense(SGA) was $1,778 Mil.
Total Current Liabilities was $2,284 Mil.
Long-Term Debt was $4,264 Mil.
Net Income was 108.6 + 52.1 + 3.7 + 37 = $201 Mil.
Non Operating Income was 0 + -54.4 + 0 + 0 = $-54 Mil.
Cash Flow from Operations was 124.5 + 83.7 + -258.1 + 605.3 = $555 Mil.
|Accounts Receivable was $1,241 Mil.
Revenue was 1800.8 + 1758.8 + 1580.7 + 1819.2 = $6,960 Mil.
Gross Profit was 523.2 + 513.5 + 443.5 + 507.4 = $1,988 Mil.
Total Current Assets was $4,728 Mil.
Total Assets was $8,623 Mil.
Property, Plant and Equipment(Net PPE) was $670 Mil.
Depreciation, Depletion and Amortization(DDA) was $159 Mil.
Selling, General & Admin. Expense(SGA) was $1,405 Mil.
Total Current Liabilities was $1,809 Mil.
Long-Term Debt was $3,380 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)|
|=||(1378.4 / 8064.7)||/||(1240.5 / 6959.5)|
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)|
|=||(602 / 6959.5)||/||(673.3 / 8064.7)|
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 - (4268.9 + 846.5) / 10823)||/||(1 - (4727.6 + 669.7) / 8622.5)|
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))|
|=||(158.7 / (158.7 + 669.7))||/||(190.9 / (190.9 + 846.5))|
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)|
|=||(1777.6 / 8064.7)||/||(1404.9 / 6959.5)|
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)|
|=||((4263.7 + 2283.6) / 10823)||/||((3379.8 + 1809.3) / 8622.5)|
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|
|=||(201.4 - -54.4||-||555.4)||/||10823|
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 -2.38 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