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Coca-Cola Co (NYSE:KO)
Beneish M-Score
-2.74 (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 -2.74 suggests that the company is not a manipulator.

KO' s Beneish M-Score Range Over the Past 10 Years
Min: -2.96   Max: -2.25
Current: -2.74

-2.96
-2.25

During the past 13 years, the highest Beneish M-Score of Coca-Cola Co was -2.25. The lowest was -2.96. And the median was -2.61.


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 * 1.0781+0.528 * 1.0003+0.404 * 1.0128+0.892 * 0.94+0.115 * 0.939
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 2.0067+4.679 * -0.0215-0.327 * 1.024
=-2.74

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $4,082 Mil.
Revenue was 10633 + 11539 + 10282 + 10000 = $42,454 Mil.
Gross Profit was 6502 + 7068 + 6213 + 5946 = $25,729 Mil.
Total Current Assets was $37,956 Mil.
Total Assets was $93,927 Mil.
Property, Plant and Equipment(Net PPE) was $11,172 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,850 Mil.
Selling, General & Admin. Expense(SGA) was $9,629 Mil.
Total Current Liabilities was $27,792 Mil.
Long-Term Debt was $31,663 Mil.
Net Income was 1046 + 3448 + 1483 + 1237 = $7,214 Mil.
Non Operating Income was -825 + 1438 + -250 + 9 = $372 Mil.
Cash Flow from Operations was 2903 + 3216 + 604 + 2138 = $8,861 Mil.
Accounts Receivable was $4,028 Mil.
Revenue was 11427 + 12156 + 10711 + 10872 = $45,166 Mil.
Gross Profit was 6850 + 7408 + 6608 + 6515 = $27,381 Mil.
Total Current Assets was $36,594 Mil.
Total Assets was $93,008 Mil.
Property, Plant and Equipment(Net PPE) was $12,615 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,942 Mil.
Selling, General & Admin. Expense(SGA) was $5,105 Mil.
Total Current Liabilities was $31,545 Mil.
Long-Term Debt was $25,949 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)
=(4082 / 42454) / (4028 / 45166)
=0.09615113 / 0.08918213
=1.0781

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)
=(27381 / 45166) / (25729 / 42454)
=0.60623035 / 0.60604419
=1.0003

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 - (37956 + 11172) / 93927) / (1 - (36594 + 12615) / 93008)
=0.47695551 / 0.47091648
=1.0128

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
=42454 / 45166
=0.94

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))
=(1942 / (1942 + 12615)) / (1850 / (1850 + 11172))
=0.13340661 / 0.14206727
=0.939

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)
=(9629 / 42454) / (5105 / 45166)
=0.22681019 / 0.1130275
=2.0067

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)
=((31663 + 27792) / 93927) / ((25949 + 31545) / 93008)
=0.63299158 / 0.61816188
=1.024

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
=(7214 - 372 - 8861) / 93927
=-0.0215

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 -2.74 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 local exchange's 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 1.07221.07390.94290.89661.13360.98460.97111.01270.99251.0139
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 0.91191.11991.02040.99151.15681.06281.0411.0561.07181.0981
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

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 1.09551.01690.93350.85730.85710.81030.91640.97771.01291.0781
GMI 0.99120.98410.9930.9941.00091.01191.00951.01591.01131.0003
AQI 1.03270.98890.99250.98471.01360.98331.01390.94330.97671.0128
SGI 0.97140.97670.98170.99440.98910.97830.9630.95080.9460.94
DEPI 1.01190.9880.98070.96990.97890.89960.87820.90210.91930.939
SGAI 0.43320.41220.97840.71160.8820.64771.26941.54671.492.0067
LVGI 1.03031.03981.07181.07541.09171.12611.09811.10751.0661.024
TATA -0.0385-0.029-0.0329-0.0411-0.0534-0.0522-0.0477-0.0348-0.0227-0.0215
M-score -2.50-2.55-2.74-2.80-2.88-2.91-2.89-2.86-2.74-2.74
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