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GuruFocus has detected 4 Warning Signs with Coca-Cola Femsa SAB de CV $KOF.
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Coca-Cola Femsa SAB de CV (NYSE:KOF)
Beneish M-Score
0.00 (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 Femsa SAB de CV has a M-score of signals that the company is a 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.


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 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 *
=

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

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

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)
=(552.119107087 / 9230.99704509) / (403.758728968 / 9363.82406817)
=0.05981143 / 0.043119
=

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)
=(4422.82221104 / 9363.82406817) / (4147.90954506 / 9230.99704509)
=0.47233077 / 0.44934578
=

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 - (2217.30604121 + 3184.90477677) / 13622.7755229) / (1 - (2474.10601303 + 2960.35056475) / 12317.1603318)
=0.60344272 / 0.55878982
=

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
=9230.99704509 / 9363.82406817
=

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))
=0 / 0
=

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)
=0.31230863 / 0.31702213
=

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)
=0.45021414 / 0.4458523
=

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
=(531.189438427 - -154.238165945 - 0) / 13622.7755229
=0.0503

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.


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 Femsa SAB de CV Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.22320.92930.91390.73581.19160.80691.11.10160.91421.4079
GMI 0.98971.02331.01231.00451.00970.98760.99371.0070.9821.0547
AQI 0.91530.9990.95450.93351.06330.93491.20041.03750.95921.0799
SGI 1.20090.96861.29191.04511.07141.28371.04420.84590.87990.9713
DEPI 1.16141.19350.95970.87081.2430.84430.97541.00120.97611.057
SGAI 1.00880.96791.01710.9581.01351.04031.04640.9670.99640.9848
LVGI 0.93150.98870.88931.03950.94251.08831.25981.06541.01571.0098
TATA -0.0295-0.0299-0.0626-0.0335-0.0136-0.0592-0.0408-0.0586-0.0472-0.0691
M-score -2.23-2.67-2.58-2.88-2.23-2.77-2.56-2.79-2.92-2.39

Coca-Cola Femsa SAB de CV Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI
GMI
AQI
SGI
DEPI
SGAI
LVGI
TATA
M-score
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