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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 -0.94. The lowest was -3.86. And the median was -2.81.
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 * 0.9411||+||0.528 * 1.0195||+||0.404 * 0.9614||+||0.892 * 1.0389||+||0.115 * 1.0337|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.984||+||4.679 * -0.0491||-||0.327 * 0.9759|
|This Year (Feb15) TTM:||Last Year (Feb14) TTM:|
|Accounts Receivable was $482 Mil.|
Revenue was 4364 + 4204 + 4018 + 5234 = $17,820 Mil.
Gross Profit was 661 + 593 + 572 + 752 = $2,578 Mil.
Total Current Assets was $1,700 Mil.
Total Assets was $4,485 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 $2,154 Mil.
Total Current Liabilities was $1,533 Mil.
Long-Term Debt was $2,693 Mil.
Net Income was 39 + 79 + 31 + 43 = $192 Mil.
Non Operating Income was 1 + 1 + 1 + 1 = $4 Mil.
Cash Flow from Operations was 302 + -54 + 103 + 57 = $408 Mil.
|Accounts Receivable was $493 Mil.
Revenue was 3953 + 4012 + 3947 + 5241 = $17,153 Mil.
Gross Profit was 590 + 569 + 576 + 795 = $2,530 Mil.
Total Current Assets was $1,543 Mil.
Total Assets was $4,374 Mil.
Property, Plant and Equipment(Net PPE) was $1,497 Mil.
Depreciation, Depletion and Amortization(DDA) was $302 Mil.
Selling, General & Admin. Expense(SGA) was $2,107 Mil.
Total Current Liabilities was $1,491 Mil.
Long-Term Debt was $2,732 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)|
|=||(482 / 17820)||/||(493 / 17153)|
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)|
|=||(593 / 17153)||/||(661 / 17820)|
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 - (1700 + 1470) / 4485)||/||(1 - (1543 + 1497) / 4374)|
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))|
|=||(302 / (302 + 1497))||/||(285 / (285 + 1470))|
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)|
|=||(2154 / 17820)||/||(2107 / 17153)|
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)|
|=||((2693 + 1533) / 4485)||/||((2732 + 1491) / 4374)|
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|
|=||(192 - 4||-||408)||/||4485|
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 -2.72 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