Switch to:
Valspar Corp (NYSE:VAL)
Beneish M-Score
-2.41 (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 Corp has a M-score of -2.40 suggests that the company is not a manipulator.

VAL' s 10-Year Beneish M-Score Range
Min: -2.89   Max: -1.94
Current: -2.41

-2.89
-1.94

During the past 13 years, the highest Beneish M-Score of Valspar Corp was -1.94. The lowest was -2.89. 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 Corp 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 * 1.1215+0.528 * 1.0032+0.404 * 1.0088+0.892 * 1.0685+0.115 * 1.0418
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9963+4.679 * -0.0165-0.327 * 1.0959
=-2.40

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

This Year (Apr14) TTM:Last Year (Apr13) TTM:
Accounts Receivable was $853 Mil.
Revenue was 1130.178 + 956.119 + 1108.302 + 1089.013 = $4,284 Mil.
Gross Profit was 380.758 + 319.053 + 355.793 + 369.361 = $1,425 Mil.
Total Current Assets was $1,622 Mil.
Total Assets was $4,092 Mil.
Property, Plant and Equipment(Net PPE) was $638 Mil.
Depreciation, Depletion and Amortization(DDA) was $99 Mil.
Selling, General & Admin. Expense(SGA) was $773 Mil.
Total Current Liabilities was $1,579 Mil.
Long-Term Debt was $1,092 Mil.
Net Income was 85.959 + 53.553 + 63.51 + 93.808 = $297 Mil.
Non Operating Income was -0.318 + -0.371 + -1.829 + -1.065 = $-4 Mil.
Cash Flow from Operations was -20.044 + 9.317 + 188.901 + 189.925 = $368 Mil.
Accounts Receivable was $712 Mil.
Revenue was 1031.219 + 875.242 + 1024.284 + 1078.348 = $4,009 Mil.
Gross Profit was 338.553 + 294.351 + 340.998 + 363.95 = $1,338 Mil.
Total Current Assets was $1,532 Mil.
Total Assets was $3,748 Mil.
Property, Plant and Equipment(Net PPE) was $553 Mil.
Depreciation, Depletion and Amortization(DDA) was $90 Mil.
Selling, General & Admin. Expense(SGA) was $727 Mil.
Total Current Liabilities was $1,220 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)
=(852.678 / 4283.612) / (711.599 / 4009.093)
=0.19905584 / 0.17749626
=1.1215

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)
=(319.053 / 4009.093) / (380.758 / 4283.612)
=0.33370441 / 0.33265501
=1.0032

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 - (1622.498 + 638.096) / 4092.162) / (1 - (1531.675 + 553.262) / 3747.631)
=0.44757954 / 0.44366534
=1.0088

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
=4283.612 / 4009.093
=1.0685

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))
=(89.658 / (89.658 + 553.262)) / (98.616 / (98.616 + 638.096))
=0.13945436 / 0.13385964
=1.0418

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)
=(773.352 / 4283.612) / (726.507 / 4009.093)
=0.18053736 / 0.1812148
=0.9963

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)
=((1092.419 + 1579.096) / 4092.162) / ((1012.55 + 1219.884) / 3747.631)
=0.65283706 / 0.59569205
=1.0959

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
=(296.83 - -3.583 - 368.099) / 4092.162
=-0.0165

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 Corp has a M-score of -2.40 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 Corp Annual Data

Oct04Oct05Oct06Oct07Oct08Oct09Oct10Oct11Oct12Oct13
DSRI 0.98431.01020.93761.03630.98051.10891.08240.86341.00711.1097
GMI 0.99911.06090.97371.01711.06560.82551.02381.06580.92561.0174
AQI 0.99010.9981.03911.00041.01930.99960.92510.8920.9651.0035
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 0.94410.97461.03711.01530.95551.22940.90181.02380.99310.9454
LVGI 0.93811.00281.00511.00250.96050.96661.04721.17261.01461.1124
TATA -0.038-0.03-0.0331-0.0088-0.0303-0.0499-0.011-0.0053-0.0162-0.0262
M-score -2.58-2.49-2.60-2.39-2.53-2.89-2.34-2.52-2.59-2.48

Valspar Corp Quarterly Data

Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14
DSRI 0.92640.97531.00710.97770.96980.96571.10971.09661.12151.1118
GMI 0.99590.94480.92560.9380.96980.99591.01741.02231.00320.9981
AQI 0.87530.88260.9651.01030.9940.96221.00351.00021.00881.0288
SGI 1.12551.06911.01721.00360.99330.9941.02061.04341.06851.094
DEPI 0.84480.89051.0411.08991.10741.11791.18981.07111.04181.2422
SGAI 1.01151.01920.99310.98840.95710.93350.94540.95370.99631.034
LVGI 1.11421.13731.01460.99861.03531.07371.11241.11721.09591.0652
TATA -0.0102-0.0055-0.0162-0.0233-0.0203-0.024-0.0262-0.0288-0.01650.0304
M-score -2.59-2.60-2.59-2.62-2.62-2.65-2.48-2.50-2.40-2.14
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK