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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 -2.20. The lowest was -3.53. 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 * 1.202||+||0.528 * 0.9951||+||0.404 * 0.945||+||0.892 * 0.9641||+||0.115 * 1.1188|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0504||+||4.679 * -0.1057||-||0.327 * 1.0818|
|This Year (Oct16) TTM:||Last Year (Oct15) TTM:|
|Accounts Receivable was $213 Mil.|
Revenue was 425.588 + 404.285 + 434.301 + 436.393 = $1,701 Mil.
Gross Profit was 314.014 + 291.116 + 325.103 + 316.167 = $1,246 Mil.
Total Current Assets was $680 Mil.
Total Assets was $2,853 Mil.
Property, Plant and Equipment(Net PPE) was $248 Mil.
Depreciation, Depletion and Amortization(DDA) was $117 Mil.
Selling, General & Admin. Expense(SGA) was $995 Mil.
Total Current Liabilities was $543 Mil.
Long-Term Debt was $884 Mil.
Net Income was -11.451 + 31.014 + 34.207 + 35.518 = $89 Mil.
Non Operating Income was -0.36 + 0.221 + -0.916 + 1.431 = $0 Mil.
Cash Flow from Operations was 50.618 + -136.712 + 233.346 + 243.13 = $390 Mil.
|Accounts Receivable was $183 Mil.
Revenue was 433.362 + 422.981 + 441.646 + 465.905 = $1,764 Mil.
Gross Profit was 316.768 + 303.252 + 324.802 + 341.66 = $1,286 Mil.
Total Current Assets was $619 Mil.
Total Assets was $2,883 Mil.
Property, Plant and Equipment(Net PPE) was $205 Mil.
Depreciation, Depletion and Amortization(DDA) was $115 Mil.
Selling, General & Admin. Expense(SGA) was $983 Mil.
Total Current Liabilities was $593 Mil.
Long-Term Debt was $739 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)|
|=||(212.59 / 1700.567)||/||(183.447 / 1763.894)|
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)|
|=||(1286.482 / 1763.894)||/||(1246.4 / 1700.567)|
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 - (679.532 + 248.281) / 2853.454)||/||(1 - (618.787 + 205.362) / 2882.827)|
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))|
|=||(114.914 / (114.914 + 205.362))||/||(117.217 / (117.217 + 248.281))|
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)|
|=||(995.066 / 1700.567)||/||(982.572 / 1763.894)|
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)|
|=||((883.992 + 542.822) / 2853.454)||/||((739.051 + 593.399) / 2882.827)|
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|
|=||(89.288 - 0.376||-||390.382)||/||2853.454|
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 -2.87 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