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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 Molson Coors Brewing Co was 1.31. The lowest was -3.15. And the median was -2.65.
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 Molson Coors Brewing Co 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 * 1.1716||+||0.528 * 1.0216||+||0.404 * 1.0059||+||0.892 * 1.3693||+||0.115 * 2.0801|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.1153||+||4.679 * 0.0298||-||0.327 * 1.475|
|This Year (Dec16) TTM:||Last Year (Dec15) TTM:|
|Accounts Receivable was $654 Mil.|
Revenue was 2294 + 947.6 + 986.2 + 657.2 = $4,885 Mil.
Gross Profit was 808.4 + 406.3 + 424 + 243.2 = $1,882 Mil.
Total Current Assets was $2,170 Mil.
Total Assets was $29,342 Mil.
Property, Plant and Equipment(Net PPE) was $4,507 Mil.
Depreciation, Depletion and Amortization(DDA) was $388 Mil.
Selling, General & Admin. Expense(SGA) was $1,606 Mil.
Total Current Liabilities was $3,158 Mil.
Long-Term Debt was $11,388 Mil.
Net Income was 1438.4 + 202.5 + 172.3 + 158.8 = $1,972 Mil.
Non Operating Income was 15.2 + 0.8 + -30.4 + -15.3 = $-30 Mil.
Cash Flow from Operations was 496.7 + 365.8 + 357.8 + -93.4 = $1,127 Mil.
|Accounts Receivable was $408 Mil.
Revenue was 844.4 + 1017.4 + 1005.7 + 700 = $3,568 Mil.
Gross Profit was 301.5 + 431.5 + 425.8 + 245.2 = $1,404 Mil.
Total Current Assets was $1,259 Mil.
Total Assets was $12,276 Mil.
Property, Plant and Equipment(Net PPE) was $1,591 Mil.
Depreciation, Depletion and Amortization(DDA) was $314 Mil.
Selling, General & Admin. Expense(SGA) was $1,052 Mil.
Total Current Liabilities was $1,217 Mil.
Long-Term Debt was $2,909 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)|
|=||(654.4 / 4885)||/||(407.9 / 3567.5)|
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)|
|=||(1404 / 3567.5)||/||(1881.9 / 4885)|
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 - (2169.6 + 4507.4) / 29341.5)||/||(1 - (1258.8 + 1590.8) / 12276.3)|
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))|
|=||(314.4 / (314.4 + 1590.8))||/||(388.4 / (388.4 + 4507.4))|
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)|
|=||(1606.3 / 4885)||/||(1051.8 / 3567.5)|
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)|
|=||((11387.7 + 3157.5) / 29341.5)||/||((2908.7 + 1217.2) / 12276.3)|
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|
|=||(1972 - -29.7||-||1126.9)||/||29341.5|
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.
Molson Coors Brewing Co has a M-score of -1.89 signals that the company is likely to 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
Molson Coors Brewing Co Annual Data
Molson Coors Brewing Co Quarterly Data