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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.
MWI Veterinary Supply Inc has a M-score of -2.24 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of MWI Veterinary Supply Inc was -1.82. The lowest was -2.47. And the median was -2.19.
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 * 1.0193||+||0.528 * 1.0259||+||0.404 * 0.8508||+||0.892 * 1.2172||+||0.115 * 1.1103|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9944||+||4.679 * 0.0174||-||0.327 * 1.0463|
|This Year (Jun14) TTM:||Last Year (Jun13) TTM:|
|Accounts Receivable was $385 Mil.|
Revenue was 778.448 + 721.272 + 687.259 + 605.08 = $2,792 Mil.
Gross Profit was 97.475 + 91.06 + 89.088 + 75.219 = $353 Mil.
Total Current Assets was $770 Mil.
Total Assets was $945 Mil.
Property, Plant and Equipment(Net PPE) was $50 Mil.
Depreciation, Depletion and Amortization(DDA) was $11 Mil.
Selling, General & Admin. Expense(SGA) was $230 Mil.
Total Current Liabilities was $444 Mil.
Long-Term Debt was $0 Mil.
Net Income was 19.365 + 16.776 + 18.439 + 14.217 = $69 Mil.
Non Operating Income was 0.27 + 0.237 + 0.301 + 0.252 = $1 Mil.
Cash Flow from Operations was 62.187 + 2.821 + -10.673 + -3.021 = $51 Mil.
|Accounts Receivable was $310 Mil.
Revenue was 606.443 + 563.114 + 572.848 + 551.406 = $2,294 Mil.
Gross Profit was 77.511 + 74.679 + 76.929 + 68.265 = $297 Mil.
Total Current Assets was $603 Mil.
Total Assets was $760 Mil.
Property, Plant and Equipment(Net PPE) was $38 Mil.
Depreciation, Depletion and Amortization(DDA) was $10 Mil.
Selling, General & Admin. Expense(SGA) was $190 Mil.
Total Current Liabilities was $341 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)|
|=||(384.987 / 2792.059)||/||(310.303 / 2293.811)|
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)|
|=||(91.06 / 2293.811)||/||(97.475 / 2792.059)|
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 - (769.612 + 49.661) / 945.315)||/||(1 - (603.282 + 37.772) / 760.189)|
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))|
|=||(9.776 / (9.776 + 37.772))||/||(11.286 / (11.286 + 49.661))|
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)|
|=||(230.137 / 2792.059)||/||(190.125 / 2293.811)|
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 + 443.673) / 945.315)||/||((0.033 + 340.965) / 760.189)|
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|
|=||(68.797 - 1.06||-||51.314)||/||945.315|
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 -2.24 suggests that the company will not 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