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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 -2.57 suggests that the company is not a manipulator.
During the past 12 years, the highest Beneish M-Score of Viacom, Inc. was -1.94. 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 * 1.0856||+||0.528 * 0.9619||+||0.404 * 0.9659||+||0.892 * 1.0323||+||0.115 * 0.9942|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9936||+||4.679 * -0.0209||-||0.327 * 1.1996|
|This Year (Dec13) TTM:||Last Year (Dec12) TTM:|
|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.
Net Income was 547 + 804 + 643 + 478 = $2,472 Mil.
Non Operating Income was 26 + 102 + 4 + 10 = $142 Mil.
Cash Flow from Operations was 293 + 1051 + 739 + 724 = $2,807 Mil.
|Accounts Receivable was $2,602 Mil.
Revenue was 3314 + 3363 + 3241 + 3331 = $13,249 Mil.
Gross Profit was 1551 + 1799 + 1642 + 1686 = $6,678 Mil.
Total Current Assets was $4,623 Mil.
Total Assets was $21,897 Mil.
Property, Plant and Equipment(Net PPE) was $1,046 Mil.
Depreciation, Depletion and Amortization(DDA) was $4,448 Mil.
Selling, General & Admin. Expense(SGA) was $2,765 Mil.
Total Current Liabilities was $3,722 Mil.
Long-Term Debt was $8,371 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)|
|=||(2916 / 13677)||/||(2602 / 13249)|
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)|
|=||(2000 / 13249)||/||(1723 / 13677)|
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 - (5447 + 1025) / 22778)||/||(1 - (4623 + 1046) / 21897)|
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))|
|=||(4448 / (4448 + 1046))||/||(4495 / (4495 + 1025))|
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)|
|=||(2836 / 13677)||/||(2765 / 13249)|
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)|
|=||((11868 + 3223) / 22778)||/||((8371 + 3722) / 21897)|
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|
|=||(2472 - 142||-||2807)||/||22778|
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 -2.57 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