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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 * 0.8908||+||0.528 * 1.0851||+||0.404 * 1.007||+||0.892 * 1.402||+||0.115 * 0.8348|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.8929||+||4.679 * -0.0324||-||0.327 * 1.0198|
|This Year (Jun16) TTM:||Last Year (Jun15) TTM:|
|Accounts Receivable was $308 Mil.|
Revenue was 362.706 + 343.463 + 365.95 + 321.736 = $1,394 Mil.
Gross Profit was 209.107 + 192.32 + 213.245 + 178.244 = $793 Mil.
Total Current Assets was $362 Mil.
Total Assets was $4,319 Mil.
Property, Plant and Equipment(Net PPE) was $456 Mil.
Depreciation, Depletion and Amortization(DDA) was $166 Mil.
Selling, General & Admin. Expense(SGA) was $364 Mil.
Total Current Liabilities was $155 Mil.
Long-Term Debt was $2,216 Mil.
Net Income was 18.498 + -26.19 + 14.832 + -48.493 = $-41 Mil.
Non Operating Income was 0.122 + 0.074 + -0.525 + -0.338 = $-1 Mil.
Cash Flow from Operations was 43.505 + -4.799 + 21.452 + 39.108 = $99 Mil.
|Accounts Receivable was $246 Mil.
Revenue was 320.523 + 296.734 + 216.71 + 160.224 = $994 Mil.
Gross Profit was 186.354 + 170.858 + 150.908 + 105.545 = $614 Mil.
Total Current Assets was $407 Mil.
Total Assets was $4,569 Mil.
Property, Plant and Equipment(Net PPE) was $484 Mil.
Depreciation, Depletion and Amortization(DDA) was $138 Mil.
Selling, General & Admin. Expense(SGA) was $291 Mil.
Total Current Liabilities was $171 Mil.
Long-Term Debt was $2,287 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)|
|=||(307.612 / 1393.855)||/||(246.295 / 994.191)|
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)|
|=||(613.665 / 994.191)||/||(792.916 / 1393.855)|
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 - (361.902 + 455.696) / 4319.492)||/||(1 - (406.844 + 483.581) / 4568.788)|
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))|
|=||(138.453 / (138.453 + 483.581))||/||(165.677 / (165.677 + 455.696))|
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)|
|=||(363.713 / 1393.855)||/||(290.556 / 994.191)|
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)|
|=||((2215.541 + 154.8) / 4319.492)||/||((2287.131 + 171.315) / 4568.788)|
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|
|=||(-41.353 - -0.667||-||99.266)||/||4319.492|
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 -2.33 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