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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 -0.95. The lowest was -5.78. And the median was -2.63.
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 * 0.9615||+||0.528 * 0.9643||+||0.404 * 1.0528||+||0.892 * 2.5007||+||0.115 * 0.7617|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.906||+||4.679 * -0.0115||-||0.327 * 1.0686|
|This Year (Dec14) TTM:||Last Year (Dec13) TTM:|
|Accounts Receivable was $265.2 Mil.|
Revenue was 216.71 + 160.224 + 154.111 + 143.918 = $675.0 Mil.
Gross Profit was 150.908 + 105.545 + 103.293 + 93.303 = $453.0 Mil.
Total Current Assets was $524.5 Mil.
Total Assets was $4,742.8 Mil.
Property, Plant and Equipment(Net PPE) was $495.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $88.2 Mil.
Selling, General & Admin. Expense(SGA) was $204.5 Mil.
Total Current Liabilities was $188.3 Mil.
Long-Term Debt was $2,415.0 Mil.
Net Income was 27.94 + 13.395 + 6.786 + 5.385 = $53.5 Mil.
Non Operating Income was 39.737 + 0.019 + 0 + -0.183 = $39.6 Mil.
Cash Flow from Operations was 25.16 + 40.543 + 24.355 + -21.536 = $68.5 Mil.
|Accounts Receivable was $110.3 Mil.
Revenue was 109.988 + 54.097 + 55.782 + 50.045 = $269.9 Mil.
Gross Profit was 74.173 + 33.485 + 36.207 + 30.833 = $174.7 Mil.
Total Current Assets was $203.3 Mil.
Total Assets was $1,921.4 Mil.
Property, Plant and Equipment(Net PPE) was $285.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $37.1 Mil.
Selling, General & Admin. Expense(SGA) was $90.3 Mil.
Total Current Liabilities was $80.0 Mil.
Long-Term Debt was $906.9 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)|
|=||(265.169 / 674.963)||/||(110.283 / 269.912)|
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)|
|=||(105.545 / 269.912)||/||(150.908 / 674.963)|
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 - (524.544 + 495.379) / 4742.774)||/||(1 - (203.296 + 285.467) / 1921.368)|
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))|
|=||(37.134 / (37.134 + 285.467))||/||(88.187 / (88.187 + 495.379))|
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)|
|=||(204.491 / 674.963)||/||(90.259 / 269.912)|
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)|
|=||((2415.031 + 188.281) / 4742.774)||/||((906.939 + 79.992) / 1921.368)|
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|
|=||(53.506 - 39.573||-||68.522)||/||4742.774|
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 -1.26 signals that the company is likely to 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