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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 5.71. The lowest was -5.05. And the median was -2.77.
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 * 0.962||+||0.528 * 1.0134||+||0.404 * 0.938||+||0.892 * 1.0182||+||0.115 * 1.063|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.8633||+||4.679 * -0.0416||-||0.327 * 0.9836|
|This Year (Nov14) TTM:||Last Year (Nov13) TTM:|
|Accounts Receivable was $526 Mil.|
Revenue was 4204 + 4018 + 5234 + 3955 = $17,411 Mil.
Gross Profit was 593 + 572 + 752 + 592 = $2,509 Mil.
Total Current Assets was $2,241 Mil.
Total Assets was $5,078 Mil.
Property, Plant and Equipment(Net PPE) was $1,469 Mil.
Depreciation, Depletion and Amortization(DDA) was $286 Mil.
Selling, General & Admin. Expense(SGA) was $2,108 Mil.
Total Current Liabilities was $1,964 Mil.
Long-Term Debt was $2,839 Mil.
Net Income was 79 + 31 + 43 + 26 = $179 Mil.
Non Operating Income was 1 + 1 + 1 + -2 = $1 Mil.
Cash Flow from Operations was -54 + 103 + 57 + 283 = $389 Mil.
|Accounts Receivable was $537 Mil.
Revenue was 4012 + 3947 + 5241 + 3899 = $17,099 Mil.
Gross Profit was 569 + 576 + 795 + 557 = $2,497 Mil.
Total Current Assets was $1,845 Mil.
Total Assets was $4,711 Mil.
Property, Plant and Equipment(Net PPE) was $1,513 Mil.
Depreciation, Depletion and Amortization(DDA) was $317 Mil.
Selling, General & Admin. Expense(SGA) was $2,398 Mil.
Total Current Liabilities was $1,573 Mil.
Long-Term Debt was $2,957 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)|
|=||(526 / 17411)||/||(537 / 17099)|
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)|
|=||(572 / 17099)||/||(593 / 17411)|
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 - (2241 + 1469) / 5078)||/||(1 - (1845 + 1513) / 4711)|
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))|
|=||(317 / (317 + 1513))||/||(286 / (286 + 1469))|
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)|
|=||(2108 / 17411)||/||(2398 / 17099)|
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)|
|=||((2839 + 1964) / 5078)||/||((2957 + 1573) / 4711)|
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|
|=||(179 - 1||-||389)||/||5078|
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 -2.68 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