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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 * 0.8652||+||0.528 * 1.0009||+||0.404 * 0.9965||+||0.892 * 0.9611||+||0.115 * 0.8977|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0198||+||4.679 * -0.037||-||0.327 * 1.0345|
|This Year (Mar15) TTM:||Last Year (Mar14) TTM:|
|Accounts Receivable was $459 Mil.|
Revenue was 700 + 973.8 + 1168 + 1188.5 = $4,030 Mil.
Gross Profit was 245.2 + 353.6 + 501.4 + 505.2 = $1,605 Mil.
Total Current Assets was $1,278 Mil.
Total Assets was $12,952 Mil.
Property, Plant and Equipment(Net PPE) was $1,641 Mil.
Depreciation, Depletion and Amortization(DDA) was $309 Mil.
Selling, General & Admin. Expense(SGA) was $1,141 Mil.
Total Current Liabilities was $2,254 Mil.
Long-Term Debt was $2,310 Mil.
Net Income was 81.1 + 94.1 + -34.4 + 290.9 = $432 Mil.
Non Operating Income was -2.6 + -3 + -5 + 0.7 = $-10 Mil.
Cash Flow from Operations was -202.6 + 214.2 + 482.4 + 426.3 = $920 Mil.
|Accounts Receivable was $552 Mil.
Revenue was 816 + 1028.4 + 1171.2 + 1178 = $4,194 Mil.
Gross Profit was 292.8 + 384 + 501.2 + 493.9 = $1,672 Mil.
Total Current Assets was $1,484 Mil.
Total Assets was $15,366 Mil.
Property, Plant and Equipment(Net PPE) was $1,936 Mil.
Depreciation, Depletion and Amortization(DDA) was $322 Mil.
Selling, General & Admin. Expense(SGA) was $1,164 Mil.
Total Current Liabilities was $2,072 Mil.
Long-Term Debt was $3,162 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)|
|=||(459.1 / 4030.3)||/||(552.1 / 4193.6)|
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)|
|=||(353.6 / 4193.6)||/||(245.2 / 4030.3)|
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 - (1278.1 + 1640.6) / 12951.7)||/||(1 - (1484.3 + 1936.2) / 15365.8)|
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))|
|=||(321.5 / (321.5 + 1936.2))||/||(309.3 / (309.3 + 1640.6))|
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)|
|=||(1140.6 / 4030.3)||/||(1163.8 / 4193.6)|
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)|
|=||((2310.1 + 2254.1) / 12951.7)||/||((3162.3 + 2071.8) / 15365.8)|
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|
|=||(431.7 - -9.9||-||920.3)||/||12951.7|
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 -2.84 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