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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 0.10. The lowest was -3.32. 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 * 0.867||+||0.528 * 0.9212||+||0.404 * 1.0968||+||0.892 * 1.1039||+||0.115 * 0.8677|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.1654||+||4.679 * -0.0313||-||0.327 * 0.9747|
|This Year (Mar15) TTM:||Last Year (Mar14) TTM:|
|Accounts Receivable was $1,197 Mil.|
Revenue was 1731.5 + 2438 + 2142.2 + 1975.1 = $8,287 Mil.
Gross Profit was 500.5 + 843.2 + 673.3 + 602 = $2,619 Mil.
Total Current Assets was $3,981 Mil.
Total Assets was $10,380 Mil.
Property, Plant and Equipment(Net PPE) was $798 Mil.
Depreciation, Depletion and Amortization(DDA) was $193 Mil.
Selling, General & Admin. Expense(SGA) was $2,038 Mil.
Total Current Liabilities was $1,811 Mil.
Long-Term Debt was $4,430 Mil.
Net Income was -55.5 + 78.1 + 108.6 + 52.1 = $183 Mil.
Non Operating Income was 0 + -2.3 + 0 + -54.4 = $-57 Mil.
Cash Flow from Operations was -320.6 + 676.9 + 124.5 + 83.7 = $565 Mil.
|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.
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)|
|=||(1197.3 / 8286.8)||/||(1251 / 7507)|
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)|
|=||(843.2 / 7507)||/||(500.5 / 8286.8)|
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 - (3981.4 + 798.1) / 10380)||/||(1 - (4494.5 + 854.8) / 10528.2)|
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))|
|=||(173.8 / (173.8 + 854.8))||/||(193 / (193 + 798.1))|
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)|
|=||(2037.8 / 8286.8)||/||(1584.1 / 7507)|
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)|
|=||((4429.6 + 1811.3) / 10380)||/||((4521.9 + 1972.2) / 10528.2)|
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|
|=||(183.3 - -56.7||-||564.5)||/||10380|
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 -2.69 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