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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 -3.43. And the median was -2.81.
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 * 0.996||+||0.528 * 0.9868||+||0.404 * 0.9404||+||0.892 * 1.003||+||0.115 * 0.9579|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0087||+||4.679 * -0.0535||-||0.327 * 1.0587|
|This Year (Jul15) TTM:||Last Year (Jul14) TTM:|
|Accounts Receivable was $203 Mil.|
Revenue was 422.981 + 441.646 + 465.905 + 476.972 = $1,808 Mil.
Gross Profit was 303.252 + 324.802 + 341.66 + 342.431 = $1,312 Mil.
Total Current Assets was $707 Mil.
Total Assets was $2,982 Mil.
Property, Plant and Equipment(Net PPE) was $199 Mil.
Depreciation, Depletion and Amortization(DDA) was $115 Mil.
Selling, General & Admin. Expense(SGA) was $996 Mil.
Total Current Liabilities was $660 Mil.
Long-Term Debt was $750 Mil.
Net Income was 32.457 + 46.897 + 42.548 + 53.777 = $176 Mil.
Non Operating Income was -0.08 + -1.086 + 2.783 + 0.21 = $2 Mil.
Cash Flow from Operations was -124.082 + 200.971 + 248.287 + 8.091 = $333 Mil.
|Accounts Receivable was $203 Mil.
Revenue was 437.917 + 457.089 + 457.933 + 449.153 = $1,802 Mil.
Gross Profit was 313.864 + 330.916 + 327.37 + 318.801 = $1,291 Mil.
Total Current Assets was $602 Mil.
Total Assets was $3,069 Mil.
Property, Plant and Equipment(Net PPE) was $195 Mil.
Depreciation, Depletion and Amortization(DDA) was $105 Mil.
Selling, General & Admin. Expense(SGA) was $984 Mil.
Total Current Liabilities was $583 Mil.
Long-Term Debt was $788 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)|
|=||(202.57 / 1807.504)||/||(202.77 / 1802.092)|
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)|
|=||(324.802 / 1802.092)||/||(303.252 / 1807.504)|
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 - (706.939 + 198.889) / 2981.6)||/||(1 - (601.761 + 195.27) / 3069.036)|
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))|
|=||(105.211 / (105.211 + 195.27))||/||(114.586 / (114.586 + 198.889))|
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)|
|=||(995.764 / 1807.504)||/||(984.195 / 1802.092)|
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)|
|=||((750.473 + 659.834) / 2981.6)||/||((788.013 + 583.167) / 3069.036)|
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|
|=||(175.679 - 1.827||-||333.267)||/||2981.6|
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 -2.79 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