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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 -3.37. And the median was -2.60.
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 * 1.0308||+||0.528 * 1.0174||+||0.404 * 1.0163||+||0.892 * 0.88||+||0.115 * 0.8762|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0341||+||4.679 * -0.0205||-||0.327 * 1.0317|
|This Year (Sep15) TTM:||Last Year (Sep14) TTM:|
|Accounts Receivable was $525 Mil.|
Revenue was 1017.4 + 1005.7 + 700 + 973.8 = $3,697 Mil.
Gross Profit was 431.5 + 425.8 + 245.2 + 353.6 = $1,456 Mil.
Total Current Assets was $1,352 Mil.
Total Assets was $12,645 Mil.
Property, Plant and Equipment(Net PPE) was $1,615 Mil.
Depreciation, Depletion and Amortization(DDA) was $322 Mil.
Selling, General & Admin. Expense(SGA) was $1,072 Mil.
Total Current Liabilities was $1,413 Mil.
Long-Term Debt was $2,954 Mil.
Net Income was 16.6 + 229 + 81.1 + 94.1 = $421 Mil.
Non Operating Income was 3.7 + 6.3 + -2.6 + -3 = $4 Mil.
Cash Flow from Operations was 263.4 + 400.7 + -202.6 + 214.2 = $676 Mil.
|Accounts Receivable was $578 Mil.
Revenue was 1168 + 1188.5 + 816 + 1028.4 = $4,201 Mil.
Gross Profit was 501.4 + 505.2 + 292.8 + 384 = $1,683 Mil.
Total Current Assets was $1,812 Mil.
Total Assets was $14,833 Mil.
Property, Plant and Equipment(Net PPE) was $1,850 Mil.
Depreciation, Depletion and Amortization(DDA) was $315 Mil.
Selling, General & Admin. Expense(SGA) was $1,178 Mil.
Total Current Liabilities was $2,620 Mil.
Long-Term Debt was $2,346 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)|
|=||(524.6 / 3696.9)||/||(578.3 / 4200.9)|
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)|
|=||(425.8 / 4200.9)||/||(431.5 / 3696.9)|
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 - (1351.6 + 1614.8) / 12645.3)||/||(1 - (1811.9 + 1850.2) / 14833.4)|
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))|
|=||(315.4 / (315.4 + 1850.2))||/||(321.9 / (321.9 + 1614.8))|
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)|
|=||(1071.7 / 3696.9)||/||(1177.7 / 4200.9)|
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)|
|=||((2953.9 + 1413.3) / 12645.3)||/||((2345.8 + 2619.8) / 14833.4)|
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|
|=||(420.8 - 4.4||-||675.7)||/||12645.3|
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 -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
Molson Coors Brewing Co Annual Data
Molson Coors Brewing Co Quarterly Data