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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 -2.85 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Marriott International, Inc. was -1.96. The lowest was -3.58. And the median was -2.78.
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 * 0.9718||+||0.528 * 1.0007||+||0.404 * 0.9391||+||0.892 * 1.0821||+||0.115 * 0.8173|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0402||+||4.679 * -0.0765||-||0.327 * 1.0252|
|This Year (Dec13) TTM:||Last Year (Dec12) TTM:|
|Accounts Receivable was $1,081 Mil.|
Revenue was 3219 + 3160 + 3263 + 3142 = $12,784 Mil.
Gross Profit was 438 + 412 + 458 + 406 = $1,714 Mil.
Total Current Assets was $1,903 Mil.
Total Assets was $6,794 Mil.
Property, Plant and Equipment(Net PPE) was $1,543 Mil.
Depreciation, Depletion and Amortization(DDA) was $127 Mil.
Selling, General & Admin. Expense(SGA) was $726 Mil.
Total Current Liabilities was $2,675 Mil.
Long-Term Debt was $3,147 Mil.
Net Income was 151 + 160 + 179 + 136 = $626 Mil.
Non Operating Income was -6 + 1 + 8 + 3 = $6 Mil.
Cash Flow from Operations was 335 + 195 + 492 + 118 = $1,140 Mil.
|Accounts Receivable was $1,028 Mil.
Revenue was 3757 + 2729 + 2776 + 2552 = $11,814 Mil.
Gross Profit was 515 + 345 + 403 + 322 = $1,585 Mil.
Total Current Assets was $1,475 Mil.
Total Assets was $6,342 Mil.
Property, Plant and Equipment(Net PPE) was $1,539 Mil.
Depreciation, Depletion and Amortization(DDA) was $102 Mil.
Selling, General & Admin. Expense(SGA) was $645 Mil.
Total Current Liabilities was $2,773 Mil.
Long-Term Debt was $2,528 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)|
|=||(1081 / 12784)||/||(1028 / 11814)|
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)|
|=||(412 / 11814)||/||(438 / 12784)|
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 - (1903 + 1543) / 6794)||/||(1 - (1475 + 1539) / 6342)|
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))|
|=||(102 / (102 + 1539))||/||(127 / (127 + 1543))|
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)|
|=||(726 / 12784)||/||(645 / 11814)|
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)|
|=||((3147 + 2675) / 6794)||/||((2528 + 2773) / 6342)|
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|
|=||(626 - 6||-||1140)||/||6794|
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 -2.85 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