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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 -1.06. The lowest was -3.86. And the median was -2.75.
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 * 0.9564||+||0.528 * 0.9799||+||0.404 * 1.0066||+||0.892 * 0.9783||+||0.115 * 1.0338|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0032||+||4.679 * 0.0323||-||0.327 * 0.9653|
|This Year (Feb16) TTM:||Last Year (Feb15) TTM:|
|Accounts Receivable was $451 Mil.|
Revenue was 3946 + 4114 + 4062 + 5407 = $17,529 Mil.
Gross Profit was 590 + 601 + 583 + 810 = $2,584 Mil.
Total Current Assets was $1,635 Mil.
Total Assets was $4,370 Mil.
Property, Plant and Equipment(Net PPE) was $1,481 Mil.
Depreciation, Depletion and Amortization(DDA) was $276 Mil.
Selling, General & Admin. Expense(SGA) was $2,124 Mil.
Total Current Liabilities was $1,572 Mil.
Long-Term Debt was $2,400 Mil.
Net Income was 52 + 34 + 31 + 61 = $178 Mil.
Non Operating Income was -390 + 1 + 0 + 2 = $-387 Mil.
Cash Flow from Operations was 172 + -25 + 165 + 112 = $424 Mil.
|Accounts Receivable was $482 Mil.
Revenue was 4387 + 4225 + 4041 + 5264 = $17,917 Mil.
Gross Profit was 663 + 596 + 574 + 755 = $2,588 Mil.
Total Current Assets was $1,700 Mil.
Total Assets was $4,434 Mil.
Property, Plant and Equipment(Net PPE) was $1,470 Mil.
Depreciation, Depletion and Amortization(DDA) was $285 Mil.
Selling, General & Admin. Expense(SGA) was $2,164 Mil.
Total Current Liabilities was $1,517 Mil.
Long-Term Debt was $2,658 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)|
|=||(451 / 17529)||/||(482 / 17917)|
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)|
|=||(601 / 17917)||/||(590 / 17529)|
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 - (1635 + 1481) / 4370)||/||(1 - (1700 + 1470) / 4434)|
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))|
|=||(285 / (285 + 1470))||/||(276 / (276 + 1481))|
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)|
|=||(2124 / 17529)||/||(2164 / 17917)|
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)|
|=||((2400 + 1572) / 4370)||/||((2658 + 1517) / 4434)|
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|
|=||(178 - -387||-||424)||/||4370|
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 -2.38 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