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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 Sysco Corp was -2.09. The lowest was -10.23. And the median was -2.61.
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 Sysco Corp 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 * 0.9924||+||0.528 * 0.9802||+||0.404 * 1.3462||+||0.892 * 1.0114||+||0.115 * 0.9922|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0426||+||4.679 * -0.0698||-||0.327 * 0.9726|
* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.
|This Year (Mar16) TTM:||Last Year (Mar15) TTM:|
|Accounts Receivable was $3,509 Mil.|
Revenue was 12002.791 + 12153.626 + 12562.611 + 12401.938 = $49,121 Mil.
Gross Profit was 2142.825 + 2156.814 + 2237.995 + 2220.164 = $8,758 Mil.
Total Current Assets was $6,960 Mil.
Total Assets was $13,351 Mil.
Property, Plant and Equipment(Net PPE) was $3,900 Mil.
Depreciation, Depletion and Amortization(DDA) was $578 Mil.
Selling, General & Admin. Expense(SGA) was $7,333 Mil.
Total Current Liabilities was $4,112 Mil.
Long-Term Debt was $4,275 Mil.
Net Income was 217.136 + 272.399 + 244.42 + 73.026 = $807 Mil.
Non Operating Income was 6.952 + 7.764 + 15.24 + 25.034 = $55 Mil.
Cash Flow from Operations was 520.1 + 730.363 + -261.482 + 694.985 = $1,684 Mil.
|Accounts Receivable was $3,496 Mil.
Revenue was 11746.659 + 12087.074 + 12445.081 + 12286.992 = $48,566 Mil.
Gross Profit was 2057.498 + 2085.137 + 2188.717 + 2155.856 = $8,487 Mil.
Total Current Assets was $11,521 Mil.
Total Assets was $17,984 Mil.
Property, Plant and Equipment(Net PPE) was $3,970 Mil.
Depreciation, Depletion and Amortization(DDA) was $583 Mil.
Selling, General & Admin. Expense(SGA) was $6,954 Mil.
Total Current Liabilities was $4,340 Mil.
Long-Term Debt was $7,275 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)|
|=||(3509.438 / 49120.966)||/||(3496.254 / 48565.806)|
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)|
|=||(8487.208 / 48565.806)||/||(8757.798 / 49120.966)|
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 - (6960.033 + 3900.47) / 13351.094)||/||(1 - (11521.307 + 3970.261) / 17983.591)|
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))|
|=||(582.889 / (582.889 + 3970.261))||/||(577.786 / (577.786 + 3900.47))|
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)|
|=||(7333.128 / 49120.966)||/||(6954.319 / 48565.806)|
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)|
|=||((4274.884 + 4112.072) / 13351.094)||/||((7275.195 + 4340.048) / 17983.591)|
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|
|=||(806.981 - 54.99||-||1683.966)||/||13351.094|
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.
Sysco Corp has a M-score of -2.67 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
Sysco Corp Annual Data
Sysco Corp Quarterly Data