TWX has been removed from your Stock Email Alerts list.
Please enter Portfolio Name for new portfolio.
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 Time Warner Inc was 2.33. The lowest was -5.31. And the median was -2.50.
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 Time Warner Inc 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 * 1.1258||+||0.528 * 0.9639||+||0.404 * 0.9924||+||0.892 * 1.0427||+||0.115 * 0.9875|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0185||+||4.679 * 0.0066||-||0.327 * 0.9832|
* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.
|This Year (Dec16) TTM:||Last Year (Dec15) TTM:|
|Accounts Receivable was $8,699 Mil.|
Revenue was 7891 + 7167 + 6952 + 7308 = $29,318 Mil.
Gross Profit was 3233 + 3294 + 3112 + 3303 = $12,942 Mil.
Total Current Assets was $13,485 Mil.
Total Assets was $65,966 Mil.
Property, Plant and Equipment(Net PPE) was $2,510 Mil.
Depreciation, Depletion and Amortization(DDA) was $669 Mil.
Selling, General & Admin. Expense(SGA) was $5,123 Mil.
Total Current Liabilities was $9,703 Mil.
Long-Term Debt was $22,392 Mil.
Net Income was 293 + 1467 + 952 + 1214 = $3,926 Mil.
Non Operating Income was -993 + -27 + -131 + -40 = $-1,191 Mil.
Cash Flow from Operations was 1149 + 1568 + 1213 + 753 = $4,683 Mil.
|Accounts Receivable was $7,411 Mil.
Revenue was 7079 + 6564 + 7348 + 7127 = $28,118 Mil.
Gross Profit was 2727 + 3038 + 3160 + 3039 = $11,964 Mil.
Total Current Assets was $12,513 Mil.
Total Assets was $63,848 Mil.
Property, Plant and Equipment(Net PPE) was $2,596 Mil.
Depreciation, Depletion and Amortization(DDA) was $681 Mil.
Selling, General & Admin. Expense(SGA) was $4,824 Mil.
Total Current Liabilities was $8,002 Mil.
Long-Term Debt was $23,594 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)|
|=||(8699 / 29318)||/||(7411 / 28118)|
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)|
|=||(11964 / 28118)||/||(12942 / 29318)|
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 - (13485 + 2510) / 65966)||/||(1 - (12513 + 2596) / 63848)|
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))|
|=||(681 / (681 + 2596))||/||(669 / (669 + 2510))|
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)|
|=||(5123 / 29318)||/||(4824 / 28118)|
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)|
|=||((22392 + 9703) / 65966)||/||((23594 + 8002) / 63848)|
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|
|=||(3926 - -1191||-||4683)||/||65966|
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.
Time Warner Inc has a M-score of -2.32 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
Time Warner Inc Annual Data
Time Warner Inc Quarterly Data