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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 -2.93. 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 * 0.9375||+||0.528 * 0.9972||+||0.404 * 0.9623||+||0.892 * 1.0328||+||0.115 * 0.9874|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0565||+||4.679 * -0.0468||-||0.327 * 0.99|
|This Year (Sep15) TTM:||Last Year (Sep14) TTM:|
|Accounts Receivable was $3,531 Mil.|
Revenue was 12562.611 + 12401.938 + 11746.659 + 12087.074 = $48,798 Mil.
Gross Profit was 2237.995 + 2220.164 + 2057.498 + 2085.137 = $8,601 Mil.
Total Current Assets was $7,028 Mil.
Total Assets was $13,372 Mil.
Property, Plant and Equipment(Net PPE) was $3,961 Mil.
Depreciation, Depletion and Amortization(DDA) was $555 Mil.
Selling, General & Admin. Expense(SGA) was $7,344 Mil.
Total Current Liabilities was $3,971 Mil.
Long-Term Debt was $3,005 Mil.
Net Income was 244.42 + 73.026 + 176.955 + 157.979 = $652 Mil.
Non Operating Income was 15.24 + 25.034 + 8.577 + -2.207 = $47 Mil.
Cash Flow from Operations was -261.482 + 694.985 + 408.061 + 389.82 = $1,231 Mil.
|Accounts Receivable was $3,647 Mil.
Revenue was 12445.081 + 12286.992 + 11277.484 + 11237.969 = $47,248 Mil.
Gross Profit was 2188.717 + 2155.856 + 1994.741 + 1964.951 = $8,304 Mil.
Total Current Assets was $7,108 Mil.
Total Assets was $13,594 Mil.
Property, Plant and Equipment(Net PPE) was $3,969 Mil.
Depreciation, Depletion and Amortization(DDA) was $548 Mil.
Selling, General & Admin. Expense(SGA) was $6,730 Mil.
Total Current Liabilities was $4,536 Mil.
Long-Term Debt was $2,627 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)|
|=||(3531.105 / 48798.282)||/||(3646.817 / 47247.526)|
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)|
|=||(2220.164 / 47247.526)||/||(2237.995 / 48798.282)|
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 - (7027.96 + 3961.299) / 13371.551)||/||(1 - (7108.403 + 3968.713) / 13594.033)|
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))|
|=||(548.028 / (548.028 + 3968.713))||/||(554.986 / (554.986 + 3961.299))|
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)|
|=||(7343.571 / 48798.282)||/||(6729.728 / 47247.526)|
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)|
|=||((3004.618 + 3970.816) / 13371.551)||/||((2626.61 + 4536.489) / 13594.033)|
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|
|=||(652.38 - 46.644||-||1231.384)||/||13371.551|
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 -2.75 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