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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 * 1.137||+||0.528 * 1.0014||+||0.404 * 0.8367||+||0.892 * 0.8746||+||0.115 * 0.9865|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0647||+||4.679 * -0.0234||-||0.327 * 0.7827|
|This Year (Mar16) TTM:||Last Year (Mar15) TTM:|
|Accounts Receivable was $457 Mil.|
Revenue was 657.2 + 844.4 + 1017.4 + 1005.7 = $3,525 Mil.
Gross Profit was 243.2 + 301.5 + 431.5 + 425.8 = $1,402 Mil.
Total Current Assets was $3,763 Mil.
Total Assets was $15,210 Mil.
Property, Plant and Equipment(Net PPE) was $1,589 Mil.
Depreciation, Depletion and Amortization(DDA) was $304 Mil.
Selling, General & Admin. Expense(SGA) was $1,062 Mil.
Total Current Liabilities was $1,222 Mil.
Long-Term Debt was $2,973 Mil.
Net Income was 158.8 + 32.8 + 16.6 + 229 = $437 Mil.
Non Operating Income was -15.3 + -6.5 + 3.7 + 6.3 = $-12 Mil.
Cash Flow from Operations was -93.4 + 234.9 + 263.4 + 400.7 = $806 Mil.
|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.
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)|
|=||(456.5 / 3524.7)||/||(459.1 / 4030.3)|
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)|
|=||(1605.4 / 4030.3)||/||(1402 / 3524.7)|
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 - (3762.8 + 1588.7) / 15210.3)||/||(1 - (1278.1 + 1640.6) / 12951.7)|
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))|
|=||(309.3 / (309.3 + 1640.6))||/||(304.4 / (304.4 + 1588.7))|
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)|
|=||(1062.1 / 3524.7)||/||(1140.6 / 4030.3)|
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)|
|=||((2973.4 + 1221.9) / 15210.3)||/||((2310.1 + 2254.1) / 12951.7)|
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|
|=||(437.2 - -11.8||-||805.6)||/||15210.3|
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 -2.58 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