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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 SUPERVALU Inc was 0.22. The lowest was -5.02. And the median was -2.67.
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 SUPERVALU 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 * 0.7832||+||0.528 * 0.9992||+||0.404 * 1.2677||+||0.892 * 1.1583||+||0.115 * 0.6333|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0301||+||4.679 * 0.0411||-||0.327 * 0.9832|
|This Year (Nov16) TTM:||Last Year (Nov15) TTM:|
|Accounts Receivable was $440 Mil.|
Revenue was 3003 + 3865 + 5196 + 7513 = $19,577 Mil.
Gross Profit was 407 + 562 + 779 + 1141 = $2,889 Mil.
Total Current Assets was $1,850 Mil.
Total Assets was $4,474 Mil.
Property, Plant and Equipment(Net PPE) was $1,014 Mil.
Depreciation, Depletion and Amortization(DDA) was $274 Mil.
Selling, General & Admin. Expense(SGA) was $2,421 Mil.
Total Current Liabilities was $2,597 Mil.
Long-Term Debt was $1,454 Mil.
Net Income was -26 + 31 + 46 + 52 = $103 Mil.
Non Operating Income was 1 + -81 + 1 + -390 = $-469 Mil.
Cash Flow from Operations was -62 + 157 + 121 + 172 = $388 Mil.
|Accounts Receivable was $485 Mil.
Revenue was 3045 + 4062 + 5407 + 4387 = $16,901 Mil.
Gross Profit was 436 + 583 + 810 + 663 = $2,492 Mil.
Total Current Assets was $1,867 Mil.
Total Assets was $4,643 Mil.
Property, Plant and Equipment(Net PPE) was $1,458 Mil.
Depreciation, Depletion and Amortization(DDA) was $227 Mil.
Selling, General & Admin. Expense(SGA) was $2,029 Mil.
Total Current Liabilities was $1,786 Mil.
Long-Term Debt was $2,490 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)|
|=||(440 / 19577)||/||(485 / 16901)|
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)|
|=||(2492 / 16901)||/||(2889 / 19577)|
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 - (1850 + 1014) / 4474)||/||(1 - (1867 + 1458) / 4643)|
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))|
|=||(227 / (227 + 1458))||/||(274 / (274 + 1014))|
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)|
|=||(2421 / 19577)||/||(2029 / 16901)|
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)|
|=||((1454 + 2597) / 4474)||/||((2490 + 1786) / 4643)|
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|
|=||(103 - -469||-||388)||/||4474|
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.
SUPERVALU Inc has a M-score of -2.28 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
SUPERVALU Inc Annual Data
SUPERVALU Inc Quarterly Data