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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 2.27. The lowest was -3.45. And the median was -2.23.
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 (Dec16) TTM:||Last Year (Dec15) TTM:|
|Accounts Receivable was $552 Mil.|
Revenue was 2784.98673119 + 2200.78363716 + 2141.0650913 + 2104.16158545 = $9,231 Mil.
Gross Profit was 1218.77926943 + 980.949510487 + 988.752961863 + 959.427803271 = $4,148 Mil.
Total Current Assets was $2,217 Mil.
Total Assets was $13,623 Mil.
Property, Plant and Equipment(Net PPE) was $3,185 Mil.
Depreciation, Depletion and Amortization(DDA) was $0 Mil.
Selling, General & Admin. Expense(SGA) was $2,883 Mil.
Total Current Liabilities was $1,945 Mil.
Long-Term Debt was $4,188 Mil.
Net Income was 170.201763971 + 117.701469579 + 107.270368504 + 136.015836373 = $531 Mil.
Non Operating Income was -26.2937090228 + -46.457003887 + -76.5527667285 + -4.9346863071 = $-154 Mil.
Cash Flow from Operations was 0 + 0 + 0 + 0 = $0 Mil.
|Accounts Receivable was $404 Mil.
Revenue was 2510.1349768 + 2236.57408232 + 2361.23313866 + 2255.88187039 = $9,364 Mil.
Gross Profit was 1193.58391526 + 1065.04658911 + 1130.03255982 + 1034.15914684 = $4,423 Mil.
Total Current Assets was $2,474 Mil.
Total Assets was $12,317 Mil.
Property, Plant and Equipment(Net PPE) was $2,960 Mil.
Depreciation, Depletion and Amortization(DDA) was $0 Mil.
Selling, General & Admin. Expense(SGA) was $2,969 Mil.
Total Current Liabilities was $1,786 Mil.
Long-Term Debt was $3,706 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)|
|=||(552.119107087 / 9230.99704509)||/||(403.758728968 / 9363.82406817)|
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)|
|=||(4422.82221104 / 9363.82406817)||/||(4147.90954506 / 9230.99704509)|
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 - (2217.30604121 + 3184.90477677) / 13622.7755229)||/||(1 - (2474.10601303 + 2960.35056475) / 12317.1603318)|
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 + 2960.35056475))||/||(0 / (0 + 3184.90477677))|
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)|
|=||(2882.9200743 / 9230.99704509)||/||(2968.53943258 / 9363.82406817)|
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)|
|=||((4188.3097877 + 1944.85638464) / 13622.7755229)||/||((3706.00365562 + 1785.63059474) / 12317.1603318)|
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|
|=||(531.189438427 - -154.238165945||-||0)||/||13622.7755229|
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