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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 MWI Veterinary Supply Inc was -1.98. The lowest was -2.47. And the median was -2.22.
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 MWI Veterinary Supply 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 * 0.9985||+||0.528 * 1.0408||+||0.404 * 0.9495||+||0.892 * 1.2699||+||0.115 * 1.0664|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9812||+||4.679 * 0.0117||-||0.327 * 1.1072|
|This Year (Sep14) TTM:||Last Year (Sep13) TTM:|
|Accounts Receivable was $359 Mil.|
Revenue was 794.059 + 778.448 + 721.272 + 687.259 = $2,981 Mil.
Gross Profit was 93.69 + 97.475 + 91.06 + 89.088 = $371 Mil.
Total Current Assets was $843 Mil.
Total Assets was $1,042 Mil.
Property, Plant and Equipment(Net PPE) was $50 Mil.
Depreciation, Depletion and Amortization(DDA) was $12 Mil.
Selling, General & Admin. Expense(SGA) was $242 Mil.
Total Current Liabilities was $524 Mil.
Long-Term Debt was $0 Mil.
Net Income was 17.381 + 19.365 + 16.776 + 18.439 = $72 Mil.
Non Operating Income was 0.322 + 0.27 + 0.237 + 0.301 = $1 Mil.
Cash Flow from Operations was 4.33 + 62.187 + 2.821 + -10.673 = $59 Mil.
|Accounts Receivable was $283 Mil.
Revenue was 605.08 + 606.443 + 563.114 + 572.848 = $2,347 Mil.
Gross Profit was 75.219 + 77.511 + 74.679 + 76.929 = $304 Mil.
Total Current Assets was $643 Mil.
Total Assets was $803 Mil.
Property, Plant and Equipment(Net PPE) was $39 Mil.
Depreciation, Depletion and Amortization(DDA) was $10 Mil.
Selling, General & Admin. Expense(SGA) was $194 Mil.
Total Current Liabilities was $365 Mil.
Long-Term Debt was $0 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)|
|=||(358.757 / 2981.038)||/||(282.923 / 2347.485)|
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)|
|=||(97.475 / 2347.485)||/||(93.69 / 2981.038)|
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 - (843.17 + 50.15) / 1041.916)||/||(1 - (642.822 + 39.183) / 802.555)|
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))|
|=||(10.038 / (10.038 + 39.183))||/||(11.858 / (11.858 + 50.15))|
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)|
|=||(241.717 / 2981.038)||/||(193.999 / 2347.485)|
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 + 524.381) / 1041.916)||/||((0.016 + 364.777) / 802.555)|
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|
|=||(71.961 - 1.13||-||58.665)||/||1041.916|
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.
MWI Veterinary Supply 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
MWI Veterinary Supply Inc Annual Data
MWI Veterinary Supply Inc Quarterly Data