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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.
Viacom Inc has a M-score of -2.60 suggests that the company is not a manipulator.
During the past 12 years, the highest Beneish M-Score of Viacom Inc was -2.03. The lowest was -2.73. And the median was -2.51.
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 * 1.0232||+||0.528 * 0.9374||+||0.404 * 0.9913||+||0.892 * 0.9955||+||0.115 * 1.0707|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.037||+||4.679 * -0.0044||-||0.327 * 1.2479|
|This Year (Jun14) TTM:||Last Year (Jun13) TTM:|
|Accounts Receivable was $2,958 Mil.|
Revenue was 3421 + 3174 + 3197 + 3652 = $13,444 Mil.
Gross Profit was 1856 + 1636 + 1723 + 2000 = $7,215 Mil.
Total Current Assets was $5,704 Mil.
Total Assets was $22,948 Mil.
Property, Plant and Equipment(Net PPE) was $998 Mil.
Depreciation, Depletion and Amortization(DDA) was $4,316 Mil.
Selling, General & Admin. Expense(SGA) was $2,872 Mil.
Total Current Liabilities was $3,383 Mil.
Long-Term Debt was $12,758 Mil.
Net Income was 610 + 502 + 547 + 804 = $2,463 Mil.
Non Operating Income was 14 + 7 + 26 + 102 = $149 Mil.
Cash Flow from Operations was 550 + 520 + 293 + 1051 = $2,414 Mil.
|Accounts Receivable was $2,904 Mil.
Revenue was 3693 + 3135 + 3314 + 3363 = $13,505 Mil.
Gross Profit was 1848 + 1596 + 1551 + 1799 = $6,794 Mil.
Total Current Assets was $5,408 Mil.
Total Assets was $22,464 Mil.
Property, Plant and Equipment(Net PPE) was $1,013 Mil.
Depreciation, Depletion and Amortization(DDA) was $6,755 Mil.
Selling, General & Admin. Expense(SGA) was $2,782 Mil.
Total Current Liabilities was $3,769 Mil.
Long-Term Debt was $8,893 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)|
|=||(2958 / 13444)||/||(2904 / 13505)|
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)|
|=||(1636 / 13505)||/||(1856 / 13444)|
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 - (5704 + 998) / 22948)||/||(1 - (5408 + 1013) / 22464)|
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))|
|=||(6755 / (6755 + 1013))||/||(4316 / (4316 + 998))|
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)|
|=||(2872 / 13444)||/||(2782 / 13505)|
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)|
|=||((12758 + 3383) / 22948)||/||((8893 + 3769) / 22464)|
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|
|=||(2463 - 149||-||2414)||/||22948|
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 -2.60 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