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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 -2.34. 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 * 0.9575||+||0.528 * 0.9844||+||0.404 * 1.0103||+||0.892 * 1.0266||+||0.115 * 0.9546|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0098||+||4.679 * -0.0599||-||0.327 * 1.0416|
|This Year (Apr15) TTM:||Last Year (Apr14) TTM:|
|Accounts Receivable was $147 Mil.|
Revenue was 441.646 + 465.905 + 476.972 + 437.917 = $1,822 Mil.
Gross Profit was 324.802 + 341.66 + 342.431 + 313.864 = $1,323 Mil.
Total Current Assets was $741 Mil.
Total Assets was $3,004 Mil.
Property, Plant and Equipment(Net PPE) was $193 Mil.
Depreciation, Depletion and Amortization(DDA) was $113 Mil.
Selling, General & Admin. Expense(SGA) was $1,005 Mil.
Total Current Liabilities was $804 Mil.
Long-Term Debt was $650 Mil.
Net Income was 46.897 + 42.548 + 53.777 + 33.646 = $177 Mil.
Non Operating Income was -1.086 + 2.783 + 0.21 + -0.165 = $2 Mil.
Cash Flow from Operations was 200.971 + 248.287 + 8.091 + -102.227 = $355 Mil.
|Accounts Receivable was $150 Mil.
Revenue was 457.089 + 457.933 + 449.153 + 411.02 = $1,775 Mil.
Gross Profit was 330.916 + 327.37 + 318.801 + 291.229 = $1,268 Mil.
Total Current Assets was $790 Mil.
Total Assets was $3,077 Mil.
Property, Plant and Equipment(Net PPE) was $189 Mil.
Depreciation, Depletion and Amortization(DDA) was $103 Mil.
Selling, General & Admin. Expense(SGA) was $969 Mil.
Total Current Liabilities was $730 Mil.
Long-Term Debt was $700 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)|
|=||(147.183 / 1822.44)||/||(149.733 / 1775.195)|
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)|
|=||(341.66 / 1775.195)||/||(324.802 / 1822.44)|
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 - (740.919 + 193.01) / 3004.243)||/||(1 - (789.662 + 188.718) / 3077.365)|
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 / (103 + 188.718))||/||(113.286 / (113.286 + 193.01))|
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)|
|=||(1005 / 1822.44)||/||(969.456 / 1775.195)|
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)|
|=||((650.09 + 803.683) / 3004.243)||/||((700.1 + 729.587) / 3077.365)|
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|
|=||(176.868 - 1.742||-||355.122)||/||3004.243|
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 -2.80 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