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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.
VF Corp has a M-score of -2.53 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of VF Corp was -1.08. The lowest was -4.23. And the median was -2.55.
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 VF 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 * 0.9876||+||0.528 * 0.9852||+||0.404 * 0.9483||+||0.892 * 1.0744||+||0.115 * 0.9698|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0072||+||4.679 * -0.0144||-||0.327 * 1.0244|
|This Year (Sep14) TTM:||Last Year (Sep13) TTM:|
|Accounts Receivable was $1,765 Mil.|
Revenue was 3520.447 + 2402.076 + 2780.778 + 3290.099 = $11,993 Mil.
Gross Profit was 1701.792 + 1162.732 + 1374.212 + 1585.409 = $5,824 Mil.
Total Current Assets was $4,524 Mil.
Total Assets was $10,816 Mil.
Property, Plant and Equipment(Net PPE) was $940 Mil.
Depreciation, Depletion and Amortization(DDA) was $273 Mil.
Selling, General & Admin. Expense(SGA) was $4,060 Mil.
Total Current Liabilities was $2,266 Mil.
Long-Term Debt was $1,424 Mil.
Net Income was 470.529 + 157.682 + 297.193 + 367.667 = $1,293 Mil.
Non Operating Income was -1.609 + -0.508 + -2.092 + -2.302 = $-7 Mil.
Cash Flow from Operations was 147.259 + 205.933 + 13.654 + 1087.965 = $1,455 Mil.
|Accounts Receivable was $1,663 Mil.
Revenue was 3297.269 + 2220.411 + 2611.869 + 3033.26 = $11,163 Mil.
Gross Profit was 1569.125 + 1077.053 + 1256.592 + 1437.748 = $5,341 Mil.
Total Current Assets was $4,094 Mil.
Total Assets was $10,452 Mil.
Property, Plant and Equipment(Net PPE) was $905 Mil.
Depreciation, Depletion and Amortization(DDA) was $252 Mil.
Selling, General & Admin. Expense(SGA) was $3,751 Mil.
Total Current Liabilities was $2,055 Mil.
Long-Term Debt was $1,427 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)|
|=||(1764.636 / 11993.4)||/||(1663.118 / 11162.809)|
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)|
|=||(1162.732 / 11162.809)||/||(1701.792 / 11993.4)|
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 - (4524.213 + 940.193) / 10815.876)||/||(1 - (4093.904 + 904.809) / 10452.061)|
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))|
|=||(252.282 / (252.282 + 904.809))||/||(272.683 / (272.683 + 940.193))|
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)|
|=||(4059.683 / 11993.4)||/||(3751.465 / 11162.809)|
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)|
|=||((1424.311 + 2266.478) / 10815.876)||/||((1427.138 + 2054.66) / 10452.061)|
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|
|=||(1293.071 - -6.511||-||1454.811)||/||10815.876|
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.
VF Corp has a M-score of -2.53 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
VF Corp Annual Data
VF Corp Quarterly Data