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Beneish M-Score -0.26 higher than -2.22, which implies that it might have manipulated its financial results.
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 3.71. The lowest was -6.94. 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 * 0.4376||+||0.528 * 1.114||+||0.404 * 1.2136||+||0.892 * 4.1464||+||0.115 * 0.2913|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.4743||+||4.679 * -0.004||-||0.327 * 1.092|
|This Year (Sep14) TTM:||Last Year (Sep13) TTM:|
|Accounts Receivable was $106.1 Mil.|
Revenue was 160.224 + 154.111 + 143.918 + 109.988 = $568.2 Mil.
Gross Profit was 105.545 + 103.293 + 93.303 + 74.173 = $376.3 Mil.
Total Current Assets was $155.9 Mil.
Total Assets was $1,908.6 Mil.
Property, Plant and Equipment(Net PPE) was $276.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $68.1 Mil.
Selling, General & Admin. Expense(SGA) was $186.7 Mil.
Total Current Liabilities was $98.2 Mil.
Long-Term Debt was $904.9 Mil.
Net Income was 13.395 + 6.786 + 5.385 + -5.157 = $20.4 Mil.
Non Operating Income was 0.019 + 0 + -0.183 + -4.382 = $-4.5 Mil.
Cash Flow from Operations was 40.543 + 24.355 + -21.536 + -10.772 = $32.6 Mil.
|Accounts Receivable was $58.5 Mil.
Revenue was 54.097 + 55.782 + 50.045 + -22.881 = $137.0 Mil.
Gross Profit was 33.485 + 36.207 + 30.833 + 0.579 = $101.1 Mil.
Total Current Assets was $114.5 Mil.
Total Assets was $773.4 Mil.
Property, Plant and Equipment(Net PPE) was $166.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $10.1 Mil.
Selling, General & Admin. Expense(SGA) was $30.5 Mil.
Total Current Liabilities was $76.5 Mil.
Long-Term Debt was $295.7 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)|
|=||(106.117 / 568.241)||/||(58.486 / 137.043)|
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)|
|=||(103.293 / 137.043)||/||(105.545 / 568.241)|
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 - (155.922 + 276.668) / 1908.553)||/||(1 - (114.451 + 166.105) / 773.421)|
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))|
|=||(10.137 / (10.137 + 166.105))||/||(68.078 / (68.078 + 276.668))|
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)|
|=||(186.658 / 568.241)||/||(30.535 / 137.043)|
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)|
|=||((904.868 + 98.184) / 1908.553)||/||((295.721 + 76.498) / 773.421)|
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|
|=||(20.409 - -4.546||-||32.59)||/||1908.553|
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 -0.26 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