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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 0.35. 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 * 0.9019||+||0.528 * 0.9713||+||0.404 * 1.0537||+||0.892 * 1.0223||+||0.115 * 1.0207|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9967||+||4.679 * -0.0846||-||0.327 * 0.9737|
|This Year (Nov15) TTM:||Last Year (Nov14) TTM:|
|Accounts Receivable was $485 Mil.|
Revenue was 4114 + 4062 + 5407 + 4290 = $17,873 Mil.
Gross Profit was 601 + 583 + 810 + 653 = $2,647 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 $277 Mil.
Selling, General & Admin. Expense(SGA) was $2,149 Mil.
Total Current Liabilities was $1,786 Mil.
Long-Term Debt was $2,490 Mil.
Net Income was 34 + 31 + 61 + 39 = $165 Mil.
Non Operating Income was 1 + 0 + 2 + 1 = $4 Mil.
Cash Flow from Operations was -25 + 165 + 112 + 302 = $554 Mil.
|Accounts Receivable was $526 Mil.
Revenue was 4225 + 4041 + 5264 + 3953 = $17,483 Mil.
Gross Profit was 596 + 574 + 755 + 590 = $2,515 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 $2,109 Mil.
Total Current Liabilities was $1,964 Mil.
Long-Term Debt was $2,839 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)|
|=||(485 / 17873)||/||(526 / 17483)|
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)|
|=||(583 / 17483)||/||(601 / 17873)|
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 - (1867 + 1458) / 4643)||/||(1 - (2241 + 1469) / 5078)|
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))|
|=||(286 / (286 + 1469))||/||(277 / (277 + 1458))|
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)|
|=||(2149 / 17873)||/||(2109 / 17483)|
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)|
|=||((2490 + 1786) / 4643)||/||((2839 + 1964) / 5078)|
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|
|=||(165 - 4||-||554)||/||4643|
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 -2.93 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