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Safeway Inc (NYSE:SWY)
Beneish M-Score
-1.56 (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 -1.56 signals that the company is a manipulator.

SWY' s 10-Year Beneish M-Score Range
Min: -4.36   Max: -1.2
Current: -1.56

-4.36
-1.2

During the past 13 years, the highest Beneish M-Score of Safeway Inc was -1.20. The lowest was -4.36. And the median was -2.70.


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 * 0.6099+0.528 * 1.0146+0.404 * 1.0352+0.892 * 0.8844+0.115 * 1.0297
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0127+4.679 * 0.2706-0.327 * 0.7109
=-1.56

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $330 Mil.
Revenue was 8307.2 + 8260.9 + 10314.3 + 8622 = $35,504 Mil.
Gross Profit was 2139.5 + 2160.2 + 2730.4 + 2225.3 = $9,255 Mil.
Total Current Assets was $5,358 Mil.
Total Assets was $13,709 Mil.
Property, Plant and Equipment(Net PPE) was $7,355 Mil.
Depreciation, Depletion and Amortization(DDA) was $930 Mil.
Selling, General & Admin. Expense(SGA) was $8,685 Mil.
Total Current Liabilities was $3,019 Mil.
Long-Term Debt was $3,500 Mil.
Net Income was 95.6 + -97.6 + 3314.4 + 65.8 = $3,378 Mil.
Non Operating Income was 53.6 + -139.3 + -54.8 + 5.3 = $-135 Mil.
Cash Flow from Operations was 523.6 + -1986.6 + 934.8 + 331.5 = $-197 Mil.
Accounts Receivable was $612 Mil.
Revenue was 8149.8 + 8176.9 + 13767.5 + 10049.1 = $40,143 Mil.
Gross Profit was 2145.8 + 2166.3 + 3648.9 + 2656.9 = $10,618 Mil.
Total Current Assets was $5,672 Mil.
Total Assets was $14,555 Mil.
Property, Plant and Equipment(Net PPE) was $7,861 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,028 Mil.
Selling, General & Admin. Expense(SGA) was $9,697 Mil.
Total Current Liabilities was $5,131 Mil.
Long-Term Debt was $4,606 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)
=(330.3 / 35504.4) / (612.3 / 40143.3)
=0.00930307 / 0.01525286
=0.6099

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)
=(2160.2 / 40143.3) / (2139.5 / 35504.4)
=0.26449993 / 0.26068318
=1.0146

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 - (5358.3 + 7354.8) / 13708.6) / (1 - (5672.3 + 7861.4) / 14554.7)
=0.07261865 / 0.07014916
=1.0352

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
=35504.4 / 40143.3
=0.8844

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))
=(1027.6 / (1027.6 + 7861.4)) / (930.1 / (930.1 + 7354.8))
=0.11560355 / 0.11226448
=1.0297

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)
=(8685.3 / 35504.4) / (9696.8 / 40143.3)
=0.24462602 / 0.24155463
=1.0127

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)
=((3500.4 + 3019) / 13708.6) / ((4605.6 + 5131.4) / 14554.7)
=0.47557008 / 0.66899352
=0.7109

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
=(3378.2 - -135.2 - -196.7) / 13708.6
=0.2706

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 -1.56 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 0.8780.96441.25761.19080.85461.09491.06181.10071.37581.6302
GMI 1.00181.02241.00381.00281.01280.99131.01231.04611.01961.0092
AQI 0.95310.93390.96080.94920.95740.34891.16021.24931.0410.8201
SGI 1.00761.07241.0461.05231.0430.92621.00491.06291.01320.8175
DEPI 0.99861.00441.01171.00610.95030.9470.9740.98570.97260.9839
SGAI 1.01310.97960.9640.98840.98481.04781.00480.95990.9831.0207
LVGI 0.92390.97130.94560.93690.94831.09210.98961.12091.05420.8424
TATA -0.1105-0.0861-0.0824-0.0749-0.0741-0.2442-0.0845-0.1013-0.06830.133
M-score -3.10-2.85-2.58-2.60-2.92-3.91-2.74-2.71-2.43-1.46

Safeway Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 1.0811.09441.09311.37581.18191.09471.12871.67071.22470.6099
GMI 1.04461.03751.03271.01961.01681.00961.01011.00881.00871.0146
AQI 1.31171.26851.27431.0410.9530.84360.81970.82011.03261.0352
SGI 1.0571.04461.0281.01320.96620.91130.87920.79770.8340.8844
DEPI 0.99350.97990.9750.97260.99510.93060.93190.98390.95911.0297
SGAI 0.96390.97190.97850.9830.98550.99561.00341.01821.02271.0127
LVGI 1.23261.21411.16491.05420.95870.9450.96850.84240.7640.7109
TATA -0.0676-0.0824-0.0777-0.0683-0.0653-0.0791-0.07770.1330.2430.2706
M-score -2.59-2.68-2.66-2.43-2.64-2.89-2.90-1.44-1.20-1.56
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