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Monster Beverage Corp (NAS:MNST)
Beneish M-Score
-1.41 (As of Today)

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.

Monster Beverage Corp has a M-score of -1.41 signals that the company is a manipulator.

MNST' s 10-Year Beneish M-Score Range
Min: -3.9   Max: -0.12
Current: -1.41

-3.9
-0.12

During the past 13 years, the highest Beneish M-Score of Monster Beverage Corp was -0.12. The lowest was -3.90. And the median was -2.12.


Definition

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 Monster Beverage Corp 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 * 0.8661+0.528 * 0.947+0.404 * 2.8495+0.892 * 1.0881+0.115 * 0.9965
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.29+4.679 * 0.0506-0.327 * 0.3712
=-1.41

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $373 Mil.
Revenue was 693.722 + 626.791 + 605.566 + 635.972 = $2,562 Mil.
Gross Profit was 394.508 + 368.957 + 331.783 + 341.92 = $1,437 Mil.
Total Current Assets was $3,922 Mil.
Total Assets was $5,792 Mil.
Property, Plant and Equipment(Net PPE) was $93 Mil.
Depreciation, Depletion and Amortization(DDA) was $26 Mil.
Selling, General & Admin. Expense(SGA) was $842 Mil.
Total Current Liabilities was $492 Mil.
Long-Term Debt was $0 Mil.
Net Income was 229.004 + 4.414 + 125.331 + 121.6 = $480 Mil.
Non Operating Income was 0 + 0 + -0.002 + -0.026 = $-0 Mil.
Cash Flow from Operations was -57.78 + -81.755 + 178.518 + 148.072 = $187 Mil.
Accounts Receivable was $395 Mil.
Revenue was 687.199 + 536.129 + 540.849 + 590.422 = $2,355 Mil.
Gross Profit was 379.288 + 286.818 + 277.161 + 307.47 = $1,251 Mil.
Total Current Assets was $1,487 Mil.
Total Assets was $1,769 Mil.
Property, Plant and Equipment(Net PPE) was $91 Mil.
Depreciation, Depletion and Amortization(DDA) was $25 Mil.
Selling, General & Admin. Expense(SGA) was $600 Mil.
Total Current Liabilities was $405 Mil.
Long-Term Debt was $0 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(372.669 / 2562.051) / (395.46 / 2354.599)
=0.14545729 / 0.16795217
=0.8661

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.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(368.957 / 2354.599) / (394.508 / 2562.051)
=0.53118896 / 0.56094434
=0.947

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (3922.379 + 92.538) / 5791.581) / (1 - (1487.353 + 91.218) / 1769.019)
=0.30676667 / 0.10765741
=2.8495

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.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=2562.051 / 2354.599
=1.0881

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))
=(25.42 / (25.42 + 91.218)) / (25.905 / (25.905 + 92.538))
=0.21793927 / 0.2187128
=0.9965

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)
=(842.042 / 2562.051) / (599.876 / 2354.599)
=0.32865934 / 0.2547678
=1.29

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)
=((0 + 491.927) / 5791.581) / ((0 + 404.841) / 1769.019)
=0.08493829 / 0.22885057
=0.3712

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(480.349 - -0.028 - 187.055) / 5791.581
=0.0506

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.

Monster Beverage Corp has a M-score of -1.41 signals that the company is likely to be a manipulator.


Related Terms

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


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Monster Beverage Corp Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.17491.09420.93342.08311.64930.89461.13340.8756
GMI 0.88461.00111.010.97310.99351.01530.99040.9606
AQI 0.53210.73995.4450.92730.71531.350.78830.7619
SGI 1.93461.73631.49311.10591.30621.20991.09011.0972
DEPI 0.98961.0051.09611.29070.9261.19751.11690.9266
SGAI 0.82521.1515001.00840.97211.06870.8997
LVGI 0.87361.01320.74670.42561.64051.4160.80440.8247
TATA 0.04130.0580.00950.0677-0.03440.0494-0.0043-0.0528
M-score -1.47-1.600.01-0.72-2.11-2.12-2.32-2.81

Monster Beverage Corp Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 1.04031.0161.07921.13341.00811.04470.88310.87560.90270.8661
GMI 1.02391.00910.990.99040.98010.9780.97760.96060.94440.947
AQI 1.33571.30020.95480.78830.77591.00990.87880.76190.80662.8495
SGI 1.16041.10181.0891.09011.09951.10621.10251.09721.11191.0881
DEPI 1.14811.29531.31481.11691.04030.9150.88320.92660.92540.9965
SGAI 1.03051.06471.08821.06870.99020.96070.91980.89971.23661.29
LVGI 1.46711.40311.2060.80440.83050.87120.68630.82471.10380.3712
TATA 0.02410.0335-0.0118-0.0043-0.0391-0.0547-0.0211-0.05280.0120.0506
M-score -2.18-2.20-2.45-2.32-2.61-2.57-2.55-2.81-2.60-1.41
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