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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 Media General Inc was 0.63. The lowest was -5.78. And the median was -2.70.
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 Media General 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 * 0.762||+||0.528 * 1.125||+||0.404 * 1.0336||+||0.892 * 1.6329||+||0.115 * 0.695|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.8886||+||4.679 * -0.0356||-||0.327 * 1.0031|
|This Year (Mar16) TTM:||Last Year (Mar15) TTM:|
|Accounts Receivable was $292 Mil.|
Revenue was 343.463 + 365.95 + 321.736 + 320.523 = $1,352 Mil.
Gross Profit was 192.32 + 213.245 + 178.244 + 186.354 = $770 Mil.
Total Current Assets was $343 Mil.
Total Assets was $4,325 Mil.
Property, Plant and Equipment(Net PPE) was $457 Mil.
Depreciation, Depletion and Amortization(DDA) was $168 Mil.
Selling, General & Admin. Expense(SGA) was $361 Mil.
Total Current Liabilities was $153 Mil.
Long-Term Debt was $2,214 Mil.
Net Income was -26.19 + 14.832 + -48.493 + 1.635 = $-58 Mil.
Non Operating Income was 0.074 + -0.525 + -0.338 + 0.795 = $0 Mil.
Cash Flow from Operations was -4.799 + 21.452 + 39.108 + 39.969 = $96 Mil.
|Accounts Receivable was $235 Mil.
Revenue was 296.734 + 216.71 + 160.224 + 154.111 = $828 Mil.
Gross Profit was 170.858 + 150.908 + 105.545 + 103.293 = $531 Mil.
Total Current Assets was $504 Mil.
Total Assets was $4,696 Mil.
Property, Plant and Equipment(Net PPE) was $489 Mil.
Depreciation, Depletion and Amortization(DDA) was $112 Mil.
Selling, General & Admin. Expense(SGA) was $249 Mil.
Total Current Liabilities was $175 Mil.
Long-Term Debt was $2,387 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)|
|=||(291.889 / 1351.672)||/||(234.577 / 827.779)|
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)|
|=||(213.245 / 827.779)||/||(192.32 / 1351.672)|
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 - (342.869 + 457.418) / 4324.76)||/||(1 - (504.117 + 489.262) / 4695.876)|
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))|
|=||(112.275 / (112.275 + 489.262))||/||(167.958 / (167.958 + 457.418))|
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)|
|=||(360.871 / 1351.672)||/||(248.702 / 827.779)|
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)|
|=||((2214.153 + 153.448) / 4324.76)||/||((2387.45 + 175.372) / 4695.876)|
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|
|=||(-58.216 - 0.006||-||95.73)||/||4324.76|
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.
Media General Inc has a M-score of -2.24 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
Media General Inc Annual Data
Media General Inc Quarterly Data