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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 -2.69.
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 * 0.9697||+||0.528 * 1.013||+||0.404 * 1.0123||+||0.892 * 0.8604||+||0.115 * 0.8985|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0503||+||4.679 * -0.0275||-||0.327 * 1.0113|
|This Year (Dec15) TTM:||Last Year (Dec14) TTM:|
|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.
Net Income was 32.8 + 16.6 + 229 + 81.1 = $360 Mil.
Non Operating Income was -6.5 + 3.7 + 6.3 + -2.6 = $1 Mil.
Cash Flow from Operations was 234.9 + 263.4 + 400.7 + -202.6 = $696 Mil.
|Accounts Receivable was $489 Mil.
Revenue was 973.8 + 1168 + 1188.5 + 816 = $4,146 Mil.
Gross Profit was 353.6 + 501.4 + 505.2 + 292.8 = $1,653 Mil.
Total Current Assets was $1,577 Mil.
Total Assets was $13,980 Mil.
Property, Plant and Equipment(Net PPE) was $1,798 Mil.
Depreciation, Depletion and Amortization(DDA) was $313 Mil.
Selling, General & Admin. Expense(SGA) was $1,164 Mil.
Total Current Liabilities was $2,325 Mil.
Long-Term Debt was $2,321 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)|
|=||(407.9 / 3567.5)||/||(488.9 / 4146.3)|
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)|
|=||(431.5 / 4146.3)||/||(301.5 / 3567.5)|
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 - (1258.8 + 1590.8) / 12276.3)||/||(1 - (1577.1 + 1798) / 13980.1)|
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))|
|=||(313 / (313 + 1798))||/||(314.4 / (314.4 + 1590.8))|
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)|
|=||(1051.8 / 3567.5)||/||(1163.9 / 4146.3)|
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)|
|=||((2908.7 + 1217.2) / 12276.3)||/||((2321.3 + 2324.9) / 13980.1)|
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|
|=||(359.5 - 0.9||-||696.4)||/||12276.3|
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 -2.77 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