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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 -0.81. The lowest was -5.78. And the median was -2.62.
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 * 0.5554||+||0.528 * 1.1699||+||0.404 * 1.0237||+||0.892 * 1.9334||+||0.115 * 0.4467|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.924||+||4.679 * -0.0451||-||0.327 * 0.983|
|This Year (Dec15) TTM:||Last Year (Dec14) TTM:|
|Accounts Receivable was $298 Mil.|
Revenue was 365.95 + 321.736 + 320.523 + 296.734 = $1,305 Mil.
Gross Profit was 213.245 + 178.244 + 186.354 + 170.858 = $749 Mil.
Total Current Assets was $355 Mil.
Total Assets was $4,408 Mil.
Property, Plant and Equipment(Net PPE) was $471 Mil.
Depreciation, Depletion and Amortization(DDA) was $168 Mil.
Selling, General & Admin. Expense(SGA) was $365 Mil.
Total Current Liabilities was $157 Mil.
Long-Term Debt was $2,245 Mil.
Net Income was 14.832 + -48.493 + 1.635 + -7.433 = $-39 Mil.
Non Operating Income was -0.525 + -0.338 + 0.795 + 2.677 = $3 Mil.
Cash Flow from Operations was 21.452 + 39.108 + 39.969 + 56.419 = $157 Mil.
|Accounts Receivable was $278 Mil.
Revenue was 216.71 + 160.224 + 154.111 + 143.918 = $675 Mil.
Gross Profit was 150.908 + 105.545 + 103.293 + 93.303 = $453 Mil.
Total Current Assets was $468 Mil.
Total Assets was $4,697 Mil.
Property, Plant and Equipment(Net PPE) was $499 Mil.
Depreciation, Depletion and Amortization(DDA) was $67 Mil.
Selling, General & Admin. Expense(SGA) was $204 Mil.
Total Current Liabilities was $190 Mil.
Long-Term Debt was $2,415 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)|
|=||(298.474 / 1304.943)||/||(277.985 / 674.963)|
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)|
|=||(178.244 / 674.963)||/||(213.245 / 1304.943)|
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 - (354.648 + 470.537) / 4408.352)||/||(1 - (468.09 + 499.472) / 4697.447)|
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))|
|=||(66.557 / (66.557 + 499.472))||/||(168.12 / (168.12 + 470.537))|
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)|
|=||(365.319 / 1304.943)||/||(204.491 / 674.963)|
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)|
|=||((2245.366 + 157.428) / 4408.352)||/||((2415.031 + 189.681) / 4697.447)|
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|
|=||(-39.459 - 2.609||-||156.948)||/||4408.352|
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 -2.21 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