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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 0.95. The lowest was -4.11. 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 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 * 0.7772||+||0.528 * 0.9233||+||0.404 * 0.658||+||0.892 * 1.0086||+||0.115 * 1.476|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.1023||+||4.679 * -0.0801||-||0.327 * 0.9528|
|This Year (Nov16) TTM:||Last Year (Nov15) TTM:|
|Accounts Receivable was $3.39 Mil.|
Revenue was 10.422 + 10.523 + 14.459 + 11.188 = $46.59 Mil.
Gross Profit was 2.394 + 2.144 + 3.177 + 2.036 = $9.75 Mil.
Total Current Assets was $16.84 Mil.
Total Assets was $20.10 Mil.
Property, Plant and Equipment(Net PPE) was $3.13 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.27 Mil.
Selling, General & Admin. Expense(SGA) was $5.96 Mil.
Total Current Liabilities was $2.06 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was 0.486 + 0.552 + 0.909 + 0.132 = $2.08 Mil.
Non Operating Income was 0 + 0 + 0 + -0.11 = $-0.11 Mil.
Cash Flow from Operations was 0.605 + 0.46 + 1.435 + 1.299 = $3.80 Mil.
|Accounts Receivable was $4.32 Mil.
Revenue was 11.942 + 11.483 + 13.289 + 9.483 = $46.20 Mil.
Gross Profit was 2.38 + 2.403 + 2.242 + 1.902 = $8.93 Mil.
Total Current Assets was $17.90 Mil.
Total Assets was $20.29 Mil.
Property, Plant and Equipment(Net PPE) was $2.19 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.29 Mil.
Selling, General & Admin. Expense(SGA) was $5.36 Mil.
Total Current Liabilities was $2.18 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)|
|=||(3.386 / 46.592)||/||(4.32 / 46.197)|
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)|
|=||(8.927 / 46.197)||/||(9.751 / 46.592)|
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 - (16.836 + 3.13) / 20.099)||/||(1 - (17.896 + 2.185) / 20.285)|
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))|
|=||(0.289 / (0.289 + 2.185))||/||(0.269 / (0.269 + 3.13))|
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)|
|=||(5.959 / 46.592)||/||(5.36 / 46.197)|
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 + 2.06) / 20.099)||/||((0 + 2.182) / 20.285)|
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|
|=||(2.079 - -0.11||-||3.799)||/||20.099|
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 -3.18 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
Jewett-Cameron Trading Co Ltd Annual Data
Jewett-Cameron Trading Co Ltd Quarterly Data