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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 Marriott International Inc was -1.83. The lowest was -3.85. And the median was -2.82.
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 Marriott International Inc 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 * 1.0491||+||0.528 * 0.9906||+||0.404 * 1.0069||+||0.892 * 1.0101||+||0.115 * 0.7421|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0734||+||4.679 * -0.085||-||0.327 * 1.0719|
|This Year (Sep14) TTM:||Last Year (Sep13) TTM:|
|Accounts Receivable was $1,030 Mil.|
Revenue was 3460 + 3484 + 3293 + 3219 = $13,456 Mil.
Gross Profit was 503 + 522 + 438 + 401 = $1,864 Mil.
Total Current Assets was $1,552 Mil.
Total Assets was $6,847 Mil.
Property, Plant and Equipment(Net PPE) was $1,736 Mil.
Depreciation, Depletion and Amortization(DDA) was $151 Mil.
Selling, General & Admin. Expense(SGA) was $734 Mil.
Total Current Liabilities was $2,738 Mil.
Long-Term Debt was $3,521 Mil.
Net Income was 192 + 192 + 172 + 151 = $707 Mil.
Non Operating Income was 13 + -5 + 2 + -6 = $4 Mil.
Cash Flow from Operations was 281 + 487 + 182 + 335 = $1,285 Mil.
|Accounts Receivable was $972 Mil.
Revenue was 3160 + 3263 + 3142 + 3757 = $13,322 Mil.
Gross Profit was 426 + 472 + 415 + 515 = $1,828 Mil.
Total Current Assets was $1,646 Mil.
Total Assets was $6,480 Mil.
Property, Plant and Equipment(Net PPE) was $1,489 Mil.
Depreciation, Depletion and Amortization(DDA) was $94 Mil.
Selling, General & Admin. Expense(SGA) was $677 Mil.
Total Current Liabilities was $2,422 Mil.
Long-Term Debt was $3,104 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)|
|=||(1030 / 13456)||/||(972 / 13322)|
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)|
|=||(522 / 13322)||/||(503 / 13456)|
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 - (1552 + 1736) / 6847)||/||(1 - (1646 + 1489) / 6480)|
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))|
|=||(94 / (94 + 1489))||/||(151 / (151 + 1736))|
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)|
|=||(734 / 13456)||/||(677 / 13322)|
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)|
|=||((3521 + 2738) / 6847)||/||((3104 + 2422) / 6480)|
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|
|=||(707 - 4||-||1285)||/||6847|
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.
Marriott International Inc has a M-score of -2.89 suggests that the company will not 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
Marriott International Inc Annual Data
Marriott International Inc Quarterly Data