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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 -2.52.
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 * 1.0062||+||0.528 * 0.9583||+||0.404 * 1.0123||+||0.892 * 1.0455||+||0.115 * 1.0132|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.1003||+||4.679 * -0.0168||-||0.327 * 0.9433|
|This Year (Sep15) TTM:||Last Year (Sep14) TTM:|
|Accounts Receivable was $1,450 Mil.|
Revenue was 2256.3 + 2005.7 + 1731.5 + 2438 = $8,432 Mil.
Gross Profit was 693.5 + 607.5 + 500.5 + 843.2 = $2,645 Mil.
Total Current Assets was $5,060 Mil.
Total Assets was $12,876 Mil.
Property, Plant and Equipment(Net PPE) was $942 Mil.
Depreciation, Depletion and Amortization(DDA) was $209 Mil.
Selling, General & Admin. Expense(SGA) was $2,045 Mil.
Total Current Liabilities was $2,035 Mil.
Long-Term Debt was $5,313 Mil.
Net Income was 120.2 + 85.9 + -55.5 + 78.1 = $229 Mil.
Non Operating Income was 0 + 0 + 0 + -2.3 = $-2 Mil.
Cash Flow from Operations was 42.6 + 48.6 + -320.6 + 676.9 = $448 Mil.
|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.
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)|
|=||(1450 / 8431.5)||/||(1378.4 / 8064.7)|
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)|
|=||(607.5 / 8064.7)||/||(693.5 / 8431.5)|
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 - (5059.9 + 942.2) / 12875.5)||/||(1 - (4268.9 + 846.5) / 10823)|
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))|
|=||(190.9 / (190.9 + 846.5))||/||(209.1 / (209.1 + 942.2))|
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)|
|=||(2044.8 / 8431.5)||/||(1777.6 / 8064.7)|
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)|
|=||((5313.1 + 2034.6) / 12875.5)||/||((4263.7 + 2283.6) / 10823)|
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|
|=||(228.7 - -2.3||-||447.5)||/||12875.5|
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 -2.53 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