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Safeway Inc. (NYSE:SWY)
Beneish M-Score
-1.59 (As of Today)

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.

Safeway Inc. has a M-score of -1.59 signals that the company is a manipulator.

SWY' s 10-Year Beneish M-Score Range
Min: -3.92   Max: -1.59
Current: -1.59

-3.92
-1.59

During the past 13 years, the highest Beneish M-Score of Safeway Inc. was -1.59. The lowest was -3.92. And the median was -2.71.


Definition

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 Safeway 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 * 1.3306+0.528 * 0.9991+0.404 * 0.8201+0.892 * 1.0016+0.115 * 0.8551
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0097+4.679 * 0.133-0.327 * 0.8403
=-1.59

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $1,211 Mil.
Revenue was 10314.3 + 8622 + 8696.1 + 9994 = $37,626 Mil.
Gross Profit was 2730.4 + 2225.3 + 2281.3 + 2668.5 = $9,906 Mil.
Total Current Assets was $8,464 Mil.
Total Assets was $17,220 Mil.
Property, Plant and Equipment(Net PPE) was $7,538 Mil.
Depreciation, Depletion and Amortization(DDA) was $944 Mil.
Selling, General & Admin. Expense(SGA) was $9,196 Mil.
Total Current Liabilities was $5,856 Mil.
Long-Term Debt was $3,891 Mil.
Net Income was 3314.4 + 65.8 + 8.4 + 118.9 = $3,508 Mil.
Non Operating Income was -54.8 + 5.3 + 16.8 + 6.6 = $-26 Mil.
Cash Flow from Operations was 934.8 + 331.5 + 533 + -555.2 = $1,244 Mil.
Accounts Receivable was $909 Mil.
Revenue was 10204.7 + 8525.8 + 8833.9 + 10003 = $37,567 Mil.
Gross Profit was 2672.7 + 2231.2 + 2291.6 + 2685.2 = $9,881 Mil.
Total Current Assets was $4,168 Mil.
Total Assets was $14,657 Mil.
Property, Plant and Equipment(Net PPE) was $9,225 Mil.
Depreciation, Depletion and Amortization(DDA) was $970 Mil.
Selling, General & Admin. Expense(SGA) was $9,094 Mil.
Total Current Liabilities was $4,630 Mil.
Long-Term Debt was $5,244 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(1211.4 / 37626.4) / (909 / 37567.4)
=0.03219548 / 0.02419651
=1.3306

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.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(2225.3 / 37567.4) / (2730.4 / 37626.4)
=0.26301261 / 0.26325931
=0.9991

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (8463.7 + 7537.5) / 17219.5) / (1 - (4167.9 + 9224.6) / 14657)
=0.07075118 / 0.08627277
=0.8201

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.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=37626.4 / 37567.4
=1.0016

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))
=(970.2 / (970.2 + 9224.6)) / (943.9 / (943.9 + 7537.5))
=0.09516616 / 0.11129059
=0.8551

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)
=(9196.4 / 37626.4) / (9093.5 / 37567.4)
=0.2444135 / 0.24205827
=1.0097

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)
=((3890.8 + 5856.4) / 17219.5) / ((5243.5 + 4629.8) / 14657)
=0.56605592 / 0.67362352
=0.8403

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(3507.5 - -26.1 - 1244.1) / 17219.5
=0.133

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.

Safeway Inc. has a M-score of -1.59 signals that the company is likely to be a manipulator.


Related Terms

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


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Safeway Inc. Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.88230.96441.25761.19080.85461.09491.06181.10071.68621.3301
GMI 1.01491.02241.00381.00281.01280.99131.01231.04611.03040.9986
AQI 0.95310.93390.96080.94920.95740.34891.16021.24931.0410.8201
SGI 1.00271.07241.0461.05231.0430.92621.00491.06290.82671.002
DEPI 0.99861.00441.01171.00610.95030.9470.9740.98571.11910.8551
SGAI 0.99750.97960.9640.98840.98481.04781.00480.95990.99341.0101
LVGI 0.92390.97130.94560.93690.94831.09210.98961.11781.05970.8403
TATA -0.1105-0.0861-0.0824-0.0749-0.0741-0.2442-0.0845-0.1013-0.06830.133
M-score -3.09-2.85-2.58-2.60-2.92-3.91-2.74-2.71-2.29-1.59

Safeway Inc. Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 1.16361.10071.0811.13441.17521.61891.33361.13291.08341.3306
GMI 1.03651.04611.04461.03961.0371.02771.02331.01211.00830.9991
AQI 1.11671.24931.31171.26851.27431.0410.9530.84360.81970.8201
SGI 1.04631.06291.0571.00780.95620.8610.85630.88050.91591.0016
DEPI 1.00010.98570.99351.02951.04981.11911.1150.95040.92520.8551
SGAI 0.96650.95990.96390.97640.98760.99080.99340.99510.99371.0097
LVGI 1.03141.11781.23261.21411.16491.05970.95870.9450.96850.8403
TATA -0.0833-0.1013-0.0676-0.0824-0.0777-0.0683-0.0653-0.0791-0.07780.133
M-score -2.62-2.71-2.59-2.67-2.64-2.33-2.59-2.88-2.91-1.59
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