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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 7 years, the highest Beneish M-Score of SodaStream International Ltd was -1.67. The lowest was -2.96. And the median was -1.99.
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 SodaStream International Ltd 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 * 0.7778||+||0.528 * 1.0285||+||0.404 * 0.9841||+||0.892 * 0.8592||+||0.115 * 1.0569|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.998||+||4.679 * -0.0236||-||0.327 * 0.9954|
|This Year (Mar15) TTM:||Last Year (Mar14) TTM:|
|Accounts Receivable was $66.1 Mil.|
Revenue was 90.344 + 126.526 + 125.905 + 141.171 = $483.9 Mil.
Gross Profit was 45.451 + 55.508 + 64.477 + 71.257 = $236.7 Mil.
Total Current Assets was $272.2 Mil.
Total Assets was $452.2 Mil.
Property, Plant and Equipment(Net PPE) was $132.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $16.9 Mil.
Selling, General & Admin. Expense(SGA) was $206.9 Mil.
Total Current Liabilities was $100.5 Mil.
Long-Term Debt was $22.8 Mil.
Net Income was 6.047 + -8.19 + 9.464 + 9.243 = $16.6 Mil.
Non Operating Income was -5.702 + 2.753 + -2.002 + -0.62 = $-5.6 Mil.
Cash Flow from Operations was 0.069 + 9.37 + 22.717 + 0.638 = $32.8 Mil.
|Accounts Receivable was $98.9 Mil.
Revenue was 118.172 + 168.11 + 144.584 + 132.39 = $563.3 Mil.
Gross Profit was 61.846 + 71.329 + 78.218 + 71.938 = $283.3 Mil.
Total Current Assets was $301.4 Mil.
Total Assets was $470.8 Mil.
Property, Plant and Equipment(Net PPE) was $119.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $16.1 Mil.
Selling, General & Admin. Expense(SGA) was $241.3 Mil.
Total Current Liabilities was $129.0 Mil.
Long-Term Debt was $0.0 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)|
|=||(66.059 / 483.946)||/||(98.851 / 563.256)|
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)|
|=||(55.508 / 563.256)||/||(45.451 / 483.946)|
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 - (272.249 + 132.627) / 452.154)||/||(1 - (301.421 + 119.358) / 470.805)|
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))|
|=||(16.148 / (16.148 + 119.358))||/||(16.854 / (16.854 + 132.627))|
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)|
|=||(206.886 / 483.946)||/||(241.281 / 563.256)|
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)|
|=||((22.789 + 100.537) / 452.154)||/||((0 + 129.006) / 470.805)|
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|
|=||(16.564 - -5.571||-||32.794)||/||452.154|
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.
SodaStream International Ltd has a M-score of -2.90 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
SodaStream International Ltd Annual Data
SodaStream International Ltd Quarterly Data