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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.
During the past 13 years, the highest Beneish M-Score of Viacom Inc was -1.92. The lowest was -2.73. And the median was -2.57.
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 Viacom 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 * 1.0182||+||0.528 * 1.0084||+||0.404 * 1.0124||+||0.892 * 1.0185||+||0.115 * 0.9894|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.013||+||4.679 * -0.0022||-||0.327 * 1.1077|
|This Year (Dec14) TTM:||Last Year (Dec13) TTM:|
|Accounts Receivable was $3,024 Mil.|
Revenue was 3344 + 3991 + 3421 + 3174 = $13,930 Mil.
Gross Profit was 1721 + 2026 + 1856 + 1636 = $7,239 Mil.
Total Current Assets was $5,470 Mil.
Total Assets was $23,416 Mil.
Property, Plant and Equipment(Net PPE) was $976 Mil.
Depreciation, Depletion and Amortization(DDA) was $4,539 Mil.
Selling, General & Admin. Expense(SGA) was $2,926 Mil.
Total Current Liabilities was $4,039 Mil.
Long-Term Debt was $13,146 Mil.
Net Income was 500 + 732 + 610 + 502 = $2,344 Mil.
Non Operating Income was 15 + 0 + 14 + 7 = $36 Mil.
Cash Flow from Operations was 56 + 1234 + 550 + 520 = $2,360 Mil.
|Accounts Receivable was $2,916 Mil.
Revenue was 3197 + 3652 + 3693 + 3135 = $13,677 Mil.
Gross Profit was 1723 + 2000 + 1848 + 1596 = $7,167 Mil.
Total Current Assets was $5,447 Mil.
Total Assets was $22,778 Mil.
Property, Plant and Equipment(Net PPE) was $1,025 Mil.
Depreciation, Depletion and Amortization(DDA) was $4,495 Mil.
Selling, General & Admin. Expense(SGA) was $2,836 Mil.
Total Current Liabilities was $3,223 Mil.
Long-Term Debt was $11,868 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)|
|=||(3024 / 13930)||/||(2916 / 13677)|
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)|
|=||(2026 / 13677)||/||(1721 / 13930)|
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 - (5470 + 976) / 23416)||/||(1 - (5447 + 1025) / 22778)|
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))|
|=||(4495 / (4495 + 1025))||/||(4539 / (4539 + 976))|
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)|
|=||(2926 / 13930)||/||(2836 / 13677)|
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)|
|=||((13146 + 4039) / 23416)||/||((11868 + 3223) / 22778)|
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|
|=||(2344 - 36||-||2360)||/||23416|
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.
Viacom Inc has a M-score of -2.49 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
Viacom Inc Annual Data
Viacom Inc Quarterly Data