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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 * 1.0275||+||0.528 * 0.9798||+||0.404 * 1.023||+||0.892 * 1.0419||+||0.115 * 0.9739|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0155||+||4.679 * -0.064||-||0.327 * 1.0599|
|This Year (Jan15) TTM:||Last Year (Jan14) TTM:|
|Accounts Receivable was $220 Mil.|
Revenue was 465.905 + 476.972 + 437.917 + 457.089 = $1,838 Mil.
Gross Profit was 341.66 + 342.431 + 313.864 + 330.916 = $1,329 Mil.
Total Current Assets was $614 Mil.
Total Assets was $2,894 Mil.
Property, Plant and Equipment(Net PPE) was $188 Mil.
Depreciation, Depletion and Amortization(DDA) was $111 Mil.
Selling, General & Admin. Expense(SGA) was $1,012 Mil.
Total Current Liabilities was $764 Mil.
Long-Term Debt was $588 Mil.
Net Income was 42.548 + 53.777 + 33.646 + 35.891 = $166 Mil.
Non Operating Income was 2.783 + 0.21 + -0.165 + -0.337 = $2 Mil.
Cash Flow from Operations was 248.287 + 8.091 + -102.227 + 194.427 = $349 Mil.
|Accounts Receivable was $206 Mil.
Revenue was 457.933 + 449.153 + 411.02 + 445.854 = $1,764 Mil.
Gross Profit was 327.37 + 318.801 + 291.229 + 312.214 = $1,250 Mil.
Total Current Assets was $661 Mil.
Total Assets was $2,873 Mil.
Property, Plant and Equipment(Net PPE) was $181 Mil.
Depreciation, Depletion and Amortization(DDA) was $103 Mil.
Selling, General & Admin. Expense(SGA) was $956 Mil.
Total Current Liabilities was $633 Mil.
Long-Term Debt was $634 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)|
|=||(220.311 / 1837.883)||/||(205.796 / 1763.96)|
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)|
|=||(342.431 / 1763.96)||/||(341.66 / 1837.883)|
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 - (613.922 + 187.643) / 2894.008)||/||(1 - (661.489 + 181.092) / 2873.246)|
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))|
|=||(103.133 / (103.133 + 181.092))||/||(111.422 / (111.422 + 187.643))|
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)|
|=||(1011.907 / 1837.883)||/||(956.405 / 1763.96)|
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)|
|=||((588.111 + 764.061) / 2894.008)||/||((634 + 632.554) / 2873.246)|
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|
|=||(165.862 - 2.491||-||348.578)||/||2894.008|
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 -2.74 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