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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 Coca-Cola Femsa SAB de CV was 3.06. The lowest was -3.45. And the median was -2.25.
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 Femsa SAB de CV 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 *||+||0.528 *||+||0.404 *||+||0.892 *||+||0.115 *|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 *||+||4.679 *||-||0.327 *|
|This Year (Sep16) TTM:||Last Year (Sep15) TTM:|
|Accounts Receivable was $500 Mil.|
Revenue was 2200.78363716 + 2141.0650913 + 2104.16158545 + 2510.1349768 = $8,956 Mil.
Gross Profit was 980.949510487 + 988.752961863 + 959.427803271 + 1193.52533158 = $4,123 Mil.
Total Current Assets was $2,473 Mil.
Total Assets was $12,480 Mil.
Property, Plant and Equipment(Net PPE) was $2,982 Mil.
Depreciation, Depletion and Amortization(DDA) was $0 Mil.
Selling, General & Admin. Expense(SGA) was $2,814 Mil.
Total Current Liabilities was $1,936 Mil.
Long-Term Debt was $3,628 Mil.
Net Income was 117.701469579 + 107.270368504 + 136.015836373 + 194.322069644 = $555 Mil.
Non Operating Income was -46.457003887 + -76.5527667285 + -4.9346863071 + -95.6085672775 = $-224 Mil.
Cash Flow from Operations was 0 + 0 + 0 + 0 = $0 Mil.
|Accounts Receivable was $421 Mil.
Revenue was 2236.57408232 + 2361.23313866 + 2255.88187039 + 1665.50738611 = $8,519 Mil.
Gross Profit was 1065.04658911 + 1130.03255982 + 1034.15914684 + 740.057160566 = $3,969 Mil.
Total Current Assets was $2,271 Mil.
Total Assets was $12,636 Mil.
Property, Plant and Equipment(Net PPE) was $2,852 Mil.
Depreciation, Depletion and Amortization(DDA) was $0 Mil.
Selling, General & Admin. Expense(SGA) was $2,652 Mil.
Total Current Liabilities was $1,939 Mil.
Long-Term Debt was $4,087 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)|
|=||(500.322185038 / 8956.14529071)||/||(421.172655846 / 8519.19647748)|
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)|
|=||(3969.29545634 / 8519.19647748)||/||(4122.6556072 / 8956.14529071)|
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 - (2472.82213307 + 2982.08235465) / 12480.0972791)||/||(1 - (2270.72161153 + 2852.06102609) / 12636.0704805)|
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))|
|=||(0 / (0 + 2852.06102609))||/||(0 / (0 + 2982.08235465))|
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)|
|=||(2814.2470256 / 8956.14529071)||/||(2652.37813559 / 8519.19647748)|
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)|
|=||((3627.59566817 + 1936.22814858) / 12480.0972791)||/||((4086.9544561 + 1938.92640168) / 12636.0704805)|
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|
|=||(555.3097441 - -223.5530242||-||0)||/||12480.0972791|
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 Femsa SAB de CV has a M-score of signals that the company is likely to 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
Coca-Cola Femsa SAB de CV Annual Data
Coca-Cola Femsa SAB de CV Quarterly Data