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Valspar Corporation (NYSE:VAL)
Beneish M-Score
-2.50 (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.

Valspar Corporation has a M-score of -2.50 suggests that the company is not a manipulator.

VAL' s 10-Year Beneish M-Score Range
Min: -3.13   Max: -1.94
Current: -2.5

-3.13
-1.94

During the past 13 years, the highest Beneish M-Score of Valspar Corporation was -1.94. The lowest was -3.13. And the median was -2.51.


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 Valspar Corporation 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 * 1.0966+0.528 * 1.0223+0.404 * 1.0002+0.892 * 1.0434+0.115 * 1.0711
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9631+4.679 * -0.0288-0.327 * 1.1172
=-2.50

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

This Year (Jan14) TTM:Last Year (Jan13) TTM:
Accounts Receivable was $670 Mil.
Revenue was 956.119 + 1108.302 + 1089.013 + 1031.219 = $4,185 Mil.
Gross Profit was 319.053 + 355.793 + 369.361 + 338.553 = $1,383 Mil.
Total Current Assets was $1,528 Mil.
Total Assets was $3,983 Mil.
Property, Plant and Equipment(Net PPE) was $633 Mil.
Depreciation, Depletion and Amortization(DDA) was $96 Mil.
Selling, General & Admin. Expense(SGA) was $745 Mil.
Total Current Liabilities was $1,504 Mil.
Long-Term Debt was $1,012 Mil.
Net Income was 53.553 + 63.51 + 93.808 + 76.908 = $288 Mil.
Non Operating Income was -0.371 + -1.829 + -1.065 + -0.027 = $-3 Mil.
Cash Flow from Operations was 9.317 + 188.901 + 189.925 + 17.814 = $406 Mil.
Accounts Receivable was $586 Mil.
Revenue was 875.242 + 1024.284 + 1078.348 + 1032.572 = $4,010 Mil.
Gross Profit was 294.351 + 340.998 + 363.95 + 355.44 = $1,355 Mil.
Total Current Assets was $1,413 Mil.
Total Assets was $3,631 Mil.
Property, Plant and Equipment(Net PPE) was $557 Mil.
Depreciation, Depletion and Amortization(DDA) was $91 Mil.
Selling, General & Admin. Expense(SGA) was $741 Mil.
Total Current Liabilities was $1,041 Mil.
Long-Term Debt was $1,013 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)
=(669.975 / 4184.653) / (585.539 / 4010.446)
=0.16010288 / 0.14600346
=1.0966

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)
=(355.793 / 4010.446) / (319.053 / 4184.653)
=0.33780258 / 0.330436
=1.0223

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 - (1527.85 + 632.912) / 3982.564) / (1 - (1413.257 + 556.905) / 3630.667)
=0.4574445 / 0.45735536
=1.0002

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
=4184.653 / 4010.446
=1.0434

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))
=(91.208 / (91.208 + 556.905)) / (95.732 / (95.732 + 632.912))
=0.14072855 / 0.13138378
=1.0711

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)
=(745.023 / 4184.653) / (741.394 / 4010.446)
=0.17803698 / 0.18486572
=0.9631

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)
=((1012.354 + 1504.484) / 3982.564) / ((1012.563 + 1041.153) / 3630.667)
=0.63196423 / 0.56565805
=1.1172

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
=(287.779 - -3.292 - 405.957) / 3982.564
=-0.0288

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.

Valspar Corporation has a M-score of -2.50 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.

Valspar Corporation Annual Data

Oct04Oct05Oct06Oct07Oct08Oct09Oct10Oct11Oct12Oct13
DSRI 0.98431.01020.93761.03630.98051.10891.08240.86341.00711.1097
GMI 1.03071.05240.95161.01711.06560.82551.02381.06580.92561.0174
AQI 0.99010.98961.0481.00031.01930.99960.92510.8920.9651.0035
SGI 1.08581.1121.09731.09111.07170.82671.12081.22511.01721.0206
DEPI 0.95620.89821.05971.06170.86470.94711.19380.82811.0411.1898
SGAI 0.89640.98461.0811.01530.95551.24520.89031.02380.98070.9573
LVGI 0.93811.01230.99541.00270.96050.96661.04721.17261.01461.1124
TATA -0.039-0.0294-0.0331-0.0088-0.0303-0.0499-0.0117-0.1223-0.0162-0.0262
M-score -2.56-2.50-2.62-2.39-2.53-2.90-2.34-3.07-2.58-2.48

Valspar Corporation Quarterly Data

Oct11Jan12Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14
DSRI 0.86340.92250.92640.97531.00710.97770.96980.96571.10971.0966
GMI 1.06581.03470.99590.94480.92560.9380.96980.99591.01741.0223
AQI 0.8920.86310.87530.88260.9651.01030.9940.96221.00351.0002
SGI 1.22511.17651.12551.06911.01721.00360.99330.9941.02061.0434
DEPI 0.82810.81910.84480.89051.0411.08991.10741.11791.18981.0711
SGAI 1.02381.01891.00791.01220.98350.97880.95450.93730.95460.9631
LVGI 1.17261.16651.11421.13731.01460.99861.03531.07371.11241.1172
TATA -0.1223-0.1173-0.1215-0.1185-0.0162-0.0233-0.0203-0.024-0.0262-0.0288
M-score -3.07-3.06-3.11-3.13-2.58-2.62-2.62-2.65-2.48-2.50
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