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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 -2.43 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 -2.49.
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 * 0.9528||+||0.528 * 0.9724||+||0.404 * 1.254||+||0.892 * 1.1251||+||0.115 * 1.0685|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.053||+||4.679 * -0.029||-||0.327 * 0.8913|
|This Year (Jun14) TTM:||Last Year (Jun13) TTM:|
|Accounts Receivable was $1,265 Mil.|
Revenue was 1975.1 + 1731.8 + 2215.6 + 1800.8 = $7,723 Mil.
Gross Profit was 602 + 514.4 + 634.5 + 523.2 = $2,274 Mil.
Total Current Assets was $4,008 Mil.
Total Assets was $10,128 Mil.
Property, Plant and Equipment(Net PPE) was $849 Mil.
Depreciation, Depletion and Amortization(DDA) was $182 Mil.
Selling, General & Admin. Expense(SGA) was $1,661 Mil.
Total Current Liabilities was $2,073 Mil.
Long-Term Debt was $3,964 Mil.
Net Income was 52.1 + 3.7 + 37 + 94.9 = $188 Mil.
Non Operating Income was -54.4 + 0 + 0 + 0 = $-54 Mil.
Cash Flow from Operations was 83.7 + -258.1 + 605.3 + 104.6 = $536 Mil.
|Accounts Receivable was $1,180 Mil.
Revenue was 1758.8 + 1580.7 + 1819.2 + 1705.9 = $6,865 Mil.
Gross Profit was 513.5 + 443.5 + 507.4 + 501 = $1,965 Mil.
Total Current Assets was $3,849 Mil.
Total Assets was $7,737 Mil.
Property, Plant and Equipment(Net PPE) was $677 Mil.
Depreciation, Depletion and Amortization(DDA) was $158 Mil.
Selling, General & Admin. Expense(SGA) was $1,402 Mil.
Total Current Liabilities was $1,771 Mil.
Long-Term Debt was $3,402 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)|
|=||(1265.2 / 7723.3)||/||(1180.3 / 6864.6)|
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)|
|=||(514.4 / 6864.6)||/||(602 / 7723.3)|
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 - (4007.5 + 848.9) / 10128.3)||/||(1 - (3848.5 + 677.2) / 7737.1)|
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))|
|=||(157.8 / (157.8 + 677.2))||/||(182.4 / (182.4 + 848.9))|
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)|
|=||(1660.8 / 7723.3)||/||(1401.9 / 6864.6)|
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)|
|=||((3963.5 + 2072.7) / 10128.3)||/||((3401.9 + 1771.3) / 7737.1)|
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|
|=||(187.7 - -54.4||-||535.5)||/||10128.3|
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 -2.43 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