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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 John Wiley & Sons Inc was -2.11. The lowest was -3.42. And the median was -2.82.
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 John Wiley & Sons Inc 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 * 1.1027||+||0.528 * 0.9806||+||0.404 * 0.9911||+||0.892 * 1.0289||+||0.115 * 0.9929|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0191||+||4.679 * -0.0496||-||0.327 * 1.0684|
|This Year (Oct14) TTM:||Last Year (Oct13) TTM:|
|Accounts Receivable was $204 Mil.|
Revenue was 476.972 + 437.917 + 457.089 + 457.933 = $1,830 Mil.
Gross Profit was 342.431 + 313.864 + 330.916 + 327.37 = $1,315 Mil.
Total Current Assets was $541 Mil.
Total Assets was $2,913 Mil.
Property, Plant and Equipment(Net PPE) was $191 Mil.
Depreciation, Depletion and Amortization(DDA) was $108 Mil.
Selling, General & Admin. Expense(SGA) was $1,000 Mil.
Total Current Liabilities was $528 Mil.
Long-Term Debt was $750 Mil.
Net Income was 53.777 + 33.646 + 35.891 + 52.489 = $176 Mil.
Non Operating Income was 0.21 + -0.165 + -0.337 + 0.029 = $-0 Mil.
Cash Flow from Operations was 8.091 + -102.227 + 194.427 + 220.295 = $321 Mil.
|Accounts Receivable was $180 Mil.
Revenue was 449.153 + 411.02 + 445.854 + 472.435 = $1,778 Mil.
Gross Profit was 318.801 + 291.229 + 312.214 + 330.641 = $1,253 Mil.
Total Current Assets was $464 Mil.
Total Assets was $2,650 Mil.
Property, Plant and Equipment(Net PPE) was $184 Mil.
Depreciation, Depletion and Amortization(DDA) was $103 Mil.
Selling, General & Admin. Expense(SGA) was $954 Mil.
Total Current Liabilities was $441 Mil.
Long-Term Debt was $648 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)|
|=||(204.424 / 1829.911)||/||(180.175 / 1778.462)|
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)|
|=||(313.864 / 1778.462)||/||(342.431 / 1829.911)|
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 - (540.51 + 190.811) / 2912.775)||/||(1 - (463.582 + 184.05) / 2650.461)|
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))|
|=||(103.448 / (103.448 + 184.05))||/||(108.454 / (108.454 + 190.811))|
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)|
|=||(999.997 / 1829.911)||/||(953.693 / 1778.462)|
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)|
|=||((749.513 + 528.4) / 2912.775)||/||((647.9 + 440.513) / 2650.461)|
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|
|=||(175.803 - -0.263||-||320.586)||/||2912.775|
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.
John Wiley & Sons Inc has a M-score of -2.63 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
John Wiley & Sons Inc Annual Data
John Wiley & Sons Inc Quarterly Data