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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.
Marriott International Inc has a M-score of -2.84 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Marriott International Inc was -1.81. The lowest was -3.42. And the median was -2.79.
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 * 1.0295||+||0.528 * 0.985||+||0.404 * 1.0195||+||0.892 * 1.0206||+||0.115 * 0.6374|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9976||+||4.679 * -0.0755||-||0.327 * 1.0326|
|This Year (Jun14) TTM:||Last Year (Jun13) TTM:|
|Accounts Receivable was $1,057 Mil.|
Revenue was 3484 + 3293 + 3219 + 3160 = $13,156 Mil.
Gross Profit was 522 + 438 + 438 + 412 = $1,810 Mil.
Total Current Assets was $1,537 Mil.
Total Assets was $6,830 Mil.
Property, Plant and Equipment(Net PPE) was $1,647 Mil.
Depreciation, Depletion and Amortization(DDA) was $152 Mil.
Selling, General & Admin. Expense(SGA) was $674 Mil.
Total Current Liabilities was $2,690 Mil.
Long-Term Debt was $3,397 Mil.
Net Income was 192 + 172 + 151 + 160 = $675 Mil.
Non Operating Income was -5 + 2 + -6 + 1 = $-8 Mil.
Cash Flow from Operations was 487 + 182 + 335 + 195 = $1,199 Mil.
|Accounts Receivable was $1,006 Mil.
Revenue was 3263 + 3142 + 3757 + 2729 = $12,891 Mil.
Gross Profit was 472 + 415 + 515 + 345 = $1,747 Mil.
Total Current Assets was $1,404 Mil.
Total Assets was $6,377 Mil.
Property, Plant and Equipment(Net PPE) was $1,634 Mil.
Depreciation, Depletion and Amortization(DDA) was $93 Mil.
Selling, General & Admin. Expense(SGA) was $662 Mil.
Total Current Liabilities was $2,467 Mil.
Long-Term Debt was $3,037 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)|
|=||(1057 / 13156)||/||(1006 / 12891)|
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)|
|=||(438 / 12891)||/||(522 / 13156)|
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 - (1537 + 1647) / 6830)||/||(1 - (1404 + 1634) / 6377)|
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))|
|=||(93 / (93 + 1634))||/||(152 / (152 + 1647))|
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)|
|=||(674 / 13156)||/||(662 / 12891)|
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)|
|=||((3397 + 2690) / 6830)||/||((3037 + 2467) / 6377)|
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|
|=||(675 - -8||-||1199)||/||6830|
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 -2.84 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