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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 -0.02. The lowest was -3.30. And the median was -2.53.
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 * 0.9877||+||0.528 * 1.0155||+||0.404 * 1.1491||+||0.892 * 1.0382||+||0.115 * 0.9873|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9933||+||4.679 * -0.0377||-||0.327 * 0.9313|
* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.
|This Year (Dec15) TTM:||Last Year (Dec14) TTM:|
|Accounts Receivable was $1,310 Mil.|
Revenue was 2610.4 + 2256.3 + 2005.7 + 1731.5 = $8,604 Mil.
Gross Profit was 890.4 + 693.5 + 607.5 + 500.5 = $2,692 Mil.
Total Current Assets was $4,654 Mil.
Total Assets was $14,293 Mil.
Property, Plant and Equipment(Net PPE) was $1,074 Mil.
Depreciation, Depletion and Amortization(DDA) was $245 Mil.
Selling, General & Admin. Expense(SGA) was $2,021 Mil.
Total Current Liabilities was $2,275 Mil.
Long-Term Debt was $5,788 Mil.
Net Income was -4.1 + 120.2 + 85.9 + -55.5 = $147 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 914.1 + 42.6 + 48.6 + -320.6 = $685 Mil.
|Accounts Receivable was $1,278 Mil.
Revenue was 2438 + 2142.2 + 1975.1 + 1731.8 = $8,287 Mil.
Gross Profit was 843.2 + 673.3 + 602 + 514.4 = $2,633 Mil.
Total Current Assets was $4,318 Mil.
Total Assets was $10,799 Mil.
Property, Plant and Equipment(Net PPE) was $850 Mil.
Depreciation, Depletion and Amortization(DDA) was $191 Mil.
Selling, General & Admin. Expense(SGA) was $1,960 Mil.
Total Current Liabilities was $2,077 Mil.
Long-Term Debt was $4,464 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)|
|=||(1310.4 / 8603.9)||/||(1277.9 / 8287.1)|
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)|
|=||(2632.9 / 8287.1)||/||(2691.9 / 8603.9)|
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 - (4654.3 + 1074.4) / 14293.1)||/||(1 - (4318 + 849.9) / 10799.3)|
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))|
|=||(191.1 / (191.1 + 849.9))||/||(245.4 / (245.4 + 1074.4))|
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)|
|=||(2021.3 / 8603.9)||/||(1960 / 8287.1)|
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)|
|=||((5787.5 + 2275.3) / 14293.1)||/||((4464 + 2077.2) / 10799.3)|
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|
|=||(146.5 - 0||-||684.7)||/||14293.1|
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 -2.54 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