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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 Jewett-Cameron Trading Co Ltd was 0.99. The lowest was -3.78. And the median was -2.43.
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 Jewett-Cameron Trading Co Ltd 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 * 1.379||+||0.528 * 1.0172||+||0.404 * 0.9398||+||0.892 * 0.8817||+||0.115 * 0.9196|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.1515||+||4.679 * 0.1261||-||0.327 * 1.3574|
|This Year (Nov14) TTM:||Last Year (Nov13) TTM:|
|Accounts Receivable was $2.72 Mil.|
Revenue was 7.983 + 9.265 + 15.336 + 9.733 = $42.32 Mil.
Gross Profit was 1.87 + 1.82 + 2.951 + 1.758 = $8.40 Mil.
Total Current Assets was $16.36 Mil.
Total Assets was $18.74 Mil.
Property, Plant and Equipment(Net PPE) was $2.10 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.28 Mil.
Selling, General & Admin. Expense(SGA) was $5.05 Mil.
Total Current Liabilities was $1.44 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was 0.328 + 0.352 + 0.936 + 0.237 = $1.85 Mil.
Non Operating Income was 0 + -0.001 + 0 + 0 = $-0.00 Mil.
Cash Flow from Operations was -1.049 + 0.557 + 1.677 + -1.693 = $-0.51 Mil.
|Accounts Receivable was $2.24 Mil.
Revenue was 8.006 + 10.71 + 15.052 + 14.228 = $48.00 Mil.
Gross Profit was 1.85 + 2.37 + 3.03 + 2.44 = $9.69 Mil.
Total Current Assets was $19.64 Mil.
Total Assets was $22.23 Mil.
Property, Plant and Equipment(Net PPE) was $2.25 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.27 Mil.
Selling, General & Admin. Expense(SGA) was $4.98 Mil.
Total Current Liabilities was $1.26 Mil.
Long-Term Debt was $0.00 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)|
|=||(2.721 / 42.317)||/||(2.238 / 47.996)|
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)|
|=||(1.82 / 47.996)||/||(1.87 / 42.317)|
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 - (16.361 + 2.098) / 18.737)||/||(1 - (19.635 + 2.247) / 22.233)|
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))|
|=||(0.269 / (0.269 + 2.247))||/||(0.276 / (0.276 + 2.098))|
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)|
|=||(5.052 / 42.317)||/||(4.976 / 47.996)|
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)|
|=||((0 + 1.438) / 18.737)||/||((0 + 1.257) / 22.233)|
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|
|=||(1.853 - -0.001||-||-0.508)||/||18.737|
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.
Jewett-Cameron Trading Co Ltd has a M-score of -1.81 signals that the company is likely to 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
Jewett-Cameron Trading Co Ltd Annual Data
Jewett-Cameron Trading Co Ltd Quarterly Data