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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 -2.67.
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 * 0.8795||+||0.528 * 0.9845||+||0.404 * 0.9737||+||0.892 * 0.9983||+||0.115 * 0.9536|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9967||+||4.679 * -0.0447||-||0.327 * 0.9528|
|This Year (Sep14) TTM:||Last Year (Sep13) TTM:|
|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 $1,171 Mil.
Total Current Liabilities was $2,620 Mil.
Long-Term Debt was $2,346 Mil.
Net Income was -34.4 + 290.9 + 163.4 + 137.2 = $557 Mil.
Non Operating Income was -5 + 0.7 + 0.8 + 27.4 = $24 Mil.
Cash Flow from Operations was 482.4 + 426.3 + 149.7 + 138.2 = $1,197 Mil.
|Accounts Receivable was $659 Mil.
Revenue was 1171.2 + 1178 + 828.5 + 1030.2 = $4,208 Mil.
Gross Profit was 501.2 + 493.9 + 281.4 + 383.6 = $1,660 Mil.
Total Current Assets was $1,596 Mil.
Total Assets was $15,773 Mil.
Property, Plant and Equipment(Net PPE) was $1,977 Mil.
Depreciation, Depletion and Amortization(DDA) was $319 Mil.
Selling, General & Admin. Expense(SGA) was $1,177 Mil.
Total Current Liabilities was $2,288 Mil.
Long-Term Debt was $3,254 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)|
|=||(578.3 / 4200.9)||/||(658.6 / 4207.9)|
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)|
|=||(505.2 / 4207.9)||/||(501.4 / 4200.9)|
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 - (1811.9 + 1850.2) / 14833.4)||/||(1 - (1596.1 + 1976.7) / 15772.8)|
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))|
|=||(318.8 / (318.8 + 1976.7))||/||(315.4 / (315.4 + 1850.2))|
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)|
|=||(1170.9 / 4200.9)||/||(1176.7 / 4207.9)|
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)|
|=||((2345.8 + 2619.8) / 14833.4)||/||((3253.5 + 2287.9) / 15772.8)|
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|
|=||(557.1 - 23.9||-||1196.6)||/||14833.4|
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 -2.81 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