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Valassis Communications Inc (NYSE:VCI)
Beneish M-Score
0.00 (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.

Valassis Communications Inc has a M-score of -2.56 suggests that the company is not a manipulator.

VCI' s 10-Year Beneish M-Score Range
Min: 0   Max: 0
Current: 0

During the past 13 years, the highest Beneish M-Score of Valassis Communications Inc was 0.00. The lowest was 0.00. And the median was 0.00.


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 Valassis Communications 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 * 1.0878+0.528 * 0.9715+0.404 * 1.0104+0.892 * 0.94+0.115 * 0.9712
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0232+4.679 * -0.0209-0.327 * 0.9646
=-2.56

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

This Year (Sep13) TTM:Last Year (Sep12) TTM:
Accounts Receivable was $408 Mil.
Revenue was 489.383 + 495.887 + 482.522 + 579.439 = $2,047 Mil.
Gross Profit was 128.046 + 131.344 + 121.754 + 150.205 = $531 Mil.
Total Current Assets was $569 Mil.
Total Assets was $1,529 Mil.
Property, Plant and Equipment(Net PPE) was $110 Mil.
Depreciation, Depletion and Amortization(DDA) was $51 Mil.
Selling, General & Admin. Expense(SGA) was $311 Mil.
Total Current Liabilities was $432 Mil.
Long-Term Debt was $503 Mil.
Net Income was 27.713 + 26.786 + 21.669 + 34.117 = $110 Mil.
Non Operating Income was 1.713 + 0.621 + -0.302 + -0.495 = $2 Mil.
Cash Flow from Operations was 22.402 + 59.969 + 23.45 + 34.845 = $141 Mil.
Accounts Receivable was $399 Mil.
Revenue was 523.822 + 540.238 + 518.585 + 595.337 = $2,178 Mil.
Gross Profit was 135.538 + 136.511 + 129.691 + 147.411 = $549 Mil.
Total Current Assets was $577 Mil.
Total Assets was $1,575 Mil.
Property, Plant and Equipment(Net PPE) was $132 Mil.
Depreciation, Depletion and Amortization(DDA) was $58 Mil.
Selling, General & Admin. Expense(SGA) was $324 Mil.
Total Current Liabilities was $426 Mil.
Long-Term Debt was $573 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)
=(408.322 / 2047.231) / (399.341 / 2177.982)
=0.19945087 / 0.18335367
=1.0878

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)
=(131.344 / 2177.982) / (128.046 / 2047.231)
=0.25213753 / 0.25954521
=0.9715

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 - (569.018 + 109.826) / 1528.702) / (1 - (576.625 + 131.566) / 1574.565)
=0.55593438 / 0.5502307
=1.0104

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
=2047.231 / 2177.982
=0.94

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))
=(58.243 / (58.243 + 131.566)) / (50.73 / (50.73 + 109.826))
=0.30685057 / 0.31596452
=0.9712

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)
=(311.391 / 2047.231) / (323.78 / 2177.982)
=0.1521035 / 0.14866055
=1.0232

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)
=((502.65 + 432.32) / 1528.702) / ((572.561 + 425.783) / 1574.565)
=0.61161037 / 0.63404432
=0.9646

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
=(110.285 - 1.537 - 140.666) / 1528.702
=-0.0209

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.

Valassis Communications Inc has a M-score of -2.56 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.

Valassis Communications Inc Annual Data

Dec03Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12
DSRI 1.68411.13450.94541.35770.70820.8930.9191.03151.01720.9848
GMI 1.13731.14151.0881.07091.03331.06630.90010.94021.03140.991
AQI 1.07520.90121.02320.93922.87630.92111.04080.93041.10071.0292
SGI 1.07541.13921.08330.92262.14871.06230.94221.03980.95820.967
DEPI 1.22061.13871.12611.08420.68290.77870.89580.98480.89510.9184
SGAI 1.18090.97210.9891.151.08941.02510.97641.0060.9250.9971
LVGI 0.80990.90811.04740.92851.07091.09520.95580.73991.01550.9777
TATA -0.02720.0248-0.0354-0.0001-0.0463-0.1623-0.0832-0.0324-0.0474-0.017
M-score -1.75-2.03-2.56-2.20-1.24-3.34-3.03-2.54-2.67-2.60

Valassis Communications Inc Quarterly Data

Jun11Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13
DSRI 0.98080.98671.01721.08540.97671.02270.98481.03781.07431.0878
GMI 1.0231.04751.03141.02161.02091.00120.9910.9860.96690.9715
AQI 1.05611.07361.10071.08081.06891.02351.02921.01960.98981.0104
SGI 1.01610.98460.95820.94730.94250.95870.9670.96310.95380.94
DEPI 0.93810.92140.89510.92780.92530.9120.91840.87040.92660.9712
SGAI 0.93360.92930.9250.9661.01221.00630.99710.99950.98271.0232
LVGI 0.92750.98781.01550.97561.0040.9880.97771.01040.99280.9646
TATA -0.0038-0.0315-0.0474-0.0509-0.0476-0.0441-0.0162-0.0257-0.026-0.0209
M-score -2.44-2.59-2.67-2.64-2.75-2.70-2.59-2.62-2.60-2.56
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