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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 -2.61.
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 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 * 1.0386||+||0.528 * 0.9929||+||0.404 * 0.8316||+||0.892 * 0.911||+||0.115 * 0.9685|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0939||+||4.679 * -0.0218||-||0.327 * 0.8167|
|This Year (Jun16) TTM:||Last Year (Jun15) TTM:|
|Accounts Receivable was $563 Mil.|
Revenue was 986.2 + 657.2 + 844.4 + 1017.4 = $3,505 Mil.
Gross Profit was 424 + 243.2 + 301.5 + 431.5 = $1,400 Mil.
Total Current Assets was $4,071 Mil.
Total Assets was $15,322 Mil.
Property, Plant and Equipment(Net PPE) was $1,539 Mil.
Depreciation, Depletion and Amortization(DDA) was $293 Mil.
Selling, General & Admin. Expense(SGA) was $1,092 Mil.
Total Current Liabilities was $1,668 Mil.
Long-Term Debt was $2,680 Mil.
Net Income was 172.3 + 158.8 + 32.8 + 16.6 = $381 Mil.
Non Operating Income was -30.4 + -15.3 + -6.5 + 3.7 = $-49 Mil.
Cash Flow from Operations was 357.8 + -93.4 + 234.9 + 263.4 = $763 Mil.
|Accounts Receivable was $595 Mil.
Revenue was 1005.7 + 700 + 973.8 + 1168 = $3,848 Mil.
Gross Profit was 425.8 + 245.2 + 353.6 + 501.4 = $1,526 Mil.
Total Current Assets was $1,476 Mil.
Total Assets was $13,397 Mil.
Property, Plant and Equipment(Net PPE) was $1,709 Mil.
Depreciation, Depletion and Amortization(DDA) was $314 Mil.
Selling, General & Admin. Expense(SGA) was $1,096 Mil.
Total Current Liabilities was $2,350 Mil.
Long-Term Debt was $2,305 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)|
|=||(563.1 / 3505.2)||/||(595.1 / 3847.5)|
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)|
|=||(1526 / 3847.5)||/||(1400.2 / 3505.2)|
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 - (4070.7 + 1539.2) / 15322.2)||/||(1 - (1476.2 + 1709.4) / 13397.2)|
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))|
|=||(313.5 / (313.5 + 1709.4))||/||(293.2 / (293.2 + 1539.2))|
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)|
|=||(1092.4 / 3505.2)||/||(1096.1 / 3847.5)|
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)|
|=||((2680.3 + 1667.6) / 15322.2)||/||((2305.2 + 2349.5) / 13397.2)|
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|
|=||(380.5 - -48.5||-||762.7)||/||15322.2|
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 -2.66 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