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Coca-Cola Co (NYSE:KO)
Beneish M-Score
-2.86 (As of Today)

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.

Coca-Cola Co has a M-score of -2.86 suggests that the company is not a manipulator.

KO' s Beneish M-Score Range Over the Past 10 Years
Min: -2.86   Max: -2.42
Current: -2.86

-2.86
-2.42

During the past 13 years, the highest Beneish M-Score of Coca-Cola Co was -2.42. The lowest was -2.86. And the median was -2.67.


Definition

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 Coca-Cola Co 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 * 0.9164+0.528 * 1.0095+0.404 * 1.0151+0.892 * 0.963+0.115 * 0.8782
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.085+4.679 * -0.0477-0.327 * 1.0989
=-2.86

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $3,941 Mil.
Revenue was 10000 + 11427 + 12156 + 10711 = $44,294 Mil.
Gross Profit was 5946 + 6850 + 7408 + 6608 = $26,812 Mil.
Total Current Assets was $33,395 Mil.
Total Assets was $90,093 Mil.
Property, Plant and Equipment(Net PPE) was $12,571 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,970 Mil.
Selling, General & Admin. Expense(SGA) was $8,750 Mil.
Total Current Liabilities was $26,930 Mil.
Long-Term Debt was $28,407 Mil.
Net Income was 1237 + 1449 + 3108 + 1557 = $7,351 Mil.
Non Operating Income was 9 + -671 + 1805 + -23 = $1,120 Mil.
Cash Flow from Operations was 2138 + 3272 + 3544 + 1574 = $10,528 Mil.
Accounts Receivable was $4,466 Mil.
Revenue was 10872 + 11976 + 12574 + 10576 = $45,998 Mil.
Gross Profit was 6515 + 7346 + 7755 + 6493 = $28,109 Mil.
Total Current Assets was $32,986 Mil.
Total Assets was $92,023 Mil.
Property, Plant and Equipment(Net PPE) was $14,633 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,976 Mil.
Selling, General & Admin. Expense(SGA) was $8,375 Mil.
Total Current Liabilities was $32,374 Mil.
Long-Term Debt was $19,063 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(3941 / 44294) / (4466 / 45998)
=0.08897368 / 0.09709118
=0.9164

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.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(6850 / 45998) / (5946 / 44294)
=0.61109179 / 0.605319
=1.0095

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (33395 + 12571) / 90093) / (1 - (32986 + 14633) / 92023)
=0.48979388 / 0.48253154
=1.0151

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.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=44294 / 45998
=0.963

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))
=(1976 / (1976 + 14633)) / (1970 / (1970 + 12571))
=0.11897164 / 0.13547899
=0.8782

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)
=(8750 / 44294) / (8375 / 45998)
=0.19754369 / 0.18207313
=1.085

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)
=((28407 + 26930) / 90093) / ((19063 + 32374) / 92023)
=0.61422086 / 0.55895809
=1.0989

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(7351 - 1120 - 10528) / 90093
=-0.0477

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.

Coca-Cola Co has a M-score of -2.86 suggests that the company will not be a manipulator.


Related Terms

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


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Coca-Cola Co Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.08781.07030.84151.25361.04020.8380.93761.04940.93350.9164
GMI 0.97611.03390.99291.00271.00571.04921.0090.9940.9931.0095
AQI 1.07221.07390.94290.89661.13360.98460.97111.01270.99251.0151
SGI 1.04261.1981.1070.97011.13321.32531.03170.97580.98170.963
DEPI 1.1520.99320.93711.12281.28280.77150.96051.03210.98070.8782
SGAI 1.04520.95010.97180.99441.02510.99640.98690.57271.041.0505
LVGI 0.91191.11991.02040.99151.15681.06281.0411.0561.07181.0989
TATA -0.0392-0.0465-0.0229-0.0449-0.0542-0.0264-0.03-0.0348-0.0329-0.0477
M-score -2.49-2.44-2.67-2.51-2.54-2.49-2.67-2.56-2.75-2.86

Coca-Cola Co Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.04941.07941.09551.01690.93350.85730.85710.81030.91640.9777
GMI 0.9940.99130.99120.98410.9930.9941.00091.01191.00951.0159
AQI 1.01271.03721.03270.98890.99250.98471.01360.98331.01510.9433
SGI 0.97580.96830.97140.97670.98170.99440.98910.97830.9630.9508
DEPI 1.03211.03321.01190.9880.98070.96990.97890.89960.87820.9021
SGAI 0.47260.56670.43320.41220.97840.87591.08331.04591.0851.0476
LVGI 1.0561.03941.03031.03981.07181.07541.09171.12611.09891.1075
TATA -0.0348-0.0412-0.0385-0.029-0.0329-0.0411-0.0534-0.0522-0.0477-0.0348
M-score -2.54-2.55-2.50-2.55-2.74-2.82-2.91-2.98-2.86-2.78
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