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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 0.01. The lowest was -2.73. And the median was -2.56.
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 * 1.0609||+||0.528 * 1.0891||+||0.404 * 1.0342||+||0.892 * 0.9388||+||0.115 * 0.9674|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0178||+||4.679 * -0.0146||-||0.327 * 0.9726|
|This Year (Dec15) TTM:||Last Year (Dec14) TTM:|
|Accounts Receivable was $3,012 Mil.|
Revenue was 3154 + 3788 + 3058 + 3078 = $13,078 Mil.
Gross Profit was 1561 + 1851 + 1806 + 1022 = $6,240 Mil.
Total Current Assets was $4,699 Mil.
Total Assets was $22,362 Mil.
Property, Plant and Equipment(Net PPE) was $903 Mil.
Depreciation, Depletion and Amortization(DDA) was $5,148 Mil.
Selling, General & Admin. Expense(SGA) was $2,796 Mil.
Total Current Liabilities was $4,468 Mil.
Long-Term Debt was $11,494 Mil.
Net Income was 449 + 884 + 591 + -53 = $1,871 Mil.
Non Operating Income was 33 + -25 + 28 + 30 = $66 Mil.
Cash Flow from Operations was -126 + 1233 + 400 + 624 = $2,131 Mil.
|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.
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)|
|=||(3012 / 13078)||/||(3024 / 13930)|
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)|
|=||(1851 / 13930)||/||(1561 / 13078)|
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 - (4699 + 903) / 22362)||/||(1 - (5470 + 976) / 23416)|
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))|
|=||(4539 / (4539 + 976))||/||(5148 / (5148 + 903))|
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)|
|=||(2796 / 13078)||/||(2926 / 13930)|
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)|
|=||((11494 + 4468) / 22362)||/||((13146 + 4039) / 23416)|
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|
|=||(1871 - 66||-||2131)||/||22362|
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 -2.48 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