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Tesco PLC (OTCPK:TSCDY)
Beneish M-Score
-2.89 (As of Today)

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.

Tesco PLC has a M-score of -2.83 suggests that the company is not a manipulator.

TSCDY' s 10-Year Beneish M-Score Range
Min: -4.92   Max: -2.63
Current: -2.89

-4.92
-2.63

During the past 13 years, the highest Beneish M-Score of Tesco PLC was -2.63. The lowest was -4.92. And the median was -4.60.


Definition

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 Tesco PLC 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 * 0.8653+0.528 * 1.0384+0.404 * 0.83+0.892 * 1.0721+0.115 * 0.9992
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1154+4.679 * -0.0432-0.327 * 1.056
=-2.83

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Feb14) TTM:Last Year (Feb13) TTM:
Accounts Receivable was $3,626 Mil.
Revenue was $105,227 Mil.
Gross Profit was $6,639 Mil.
Total Current Assets was $25,781 Mil.
Total Assets was $83,053 Mil.
Property, Plant and Equipment(Net PPE) was $40,546 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,594 Mil.
Selling, General & Admin. Expense(SGA) was $2,743 Mil.
Total Current Liabilities was $35,429 Mil.
Long-Term Debt was $15,402 Mil.
Net Income was $1,613 Mil.
Non Operating Income was $-76 Mil.
Cash Flow from Operations was $5,273 Mil.
Accounts Receivable was $3,909 Mil.
Revenue was $98,152 Mil.
Gross Profit was $6,430 Mil.
Total Current Assets was $20,272 Mil.
Total Assets was $77,599 Mil.
Property, Plant and Equipment(Net PPE) was $38,498 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,461 Mil.
Selling, General & Admin. Expense(SGA) was $2,294 Mil.
Total Current Liabilities was $29,389 Mil.
Long-Term Debt was $15,585 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(3625.82781457 / 105226.821192) / (3908.66873065 / 98151.7027864)
=0.03445726 / 0.03982273
=0.8653

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.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=( / 98151.7027864) / ( / 105226.821192)
=0.0655143 / 0.06309297
=1.0384

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (25781.4569536 + 40546.3576159) / 83052.9801325) / (1 - (20272.4458204 + 38498.4520124) / 77599.0712074)
=0.20137948 / 0.242634
=0.83

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.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=105226.821192 / 98151.7027864
=1.0721

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))
=(2461.3003096 / (2461.3003096 + 38498.4520124)) / (2594.37086093 / (2594.37086093 + 40546.3576159))
=0.0600907 / 0.06013739
=0.9992

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)
=(2743.37748344 / 105226.821192) / (2294.11764706 / 98151.7027864)
=0.02607109 / 0.02337318
=1.1154

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)
=((15402.3178808 + 35428.807947) / 83052.9801325) / ((15585.1393189 + 29388.5448916) / 77599.0712074)
=0.61203253 / 0.57956472
=1.056

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(1612.58278146 - -76.1589403974 - 5273.17880795) / 83052.9801325
=-0.0432

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.

Tesco PLC has a M-score of -2.83 suggests that the company will not be a manipulator.


Related Terms

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


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Tesco PLC Annual Data

Feb06Feb07Feb08Feb09Feb10Feb11Feb12Feb13Feb14Feb15
DSRI 0.9580.86530.9883
GMI 1.28891.0384-1.8606
AQI 1.00930.831.3271
SGI 0.97211.07210.9078
DEPI 0.91620.99920.8522
SGAI 0.91821.11541.6597
LVGI 1.00931.0561.1257
TATA -0.056-0.0432-0.1374
M-score -2.65-2.83-4.77
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