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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 -1.94. 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 * 1.1283||+||0.528 * 1.0125||+||0.404 * 1.0008||+||0.892 * 0.9687||+||0.115 * 0.9885|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0104||+||4.679 * 0.0166||-||0.327 * 0.9178|
|This Year (Jun16) TTM:||Last Year (Jun15) TTM:|
|Accounts Receivable was $2,973 Mil.|
Revenue was 3107 + 3001 + 3154 + 3788 = $13,050 Mil.
Gross Profit was 1532 + 1347 + 1561 + 1851 = $6,291 Mil.
Total Current Assets was $4,609 Mil.
Total Assets was $22,605 Mil.
Property, Plant and Equipment(Net PPE) was $852 Mil.
Depreciation, Depletion and Amortization(DDA) was $4,923 Mil.
Selling, General & Admin. Expense(SGA) was $2,822 Mil.
Total Current Liabilities was $4,635 Mil.
Long-Term Debt was $10,996 Mil.
Net Income was 432 + 303 + 449 + 884 = $2,068 Mil.
Non Operating Income was 22 + 29 + 33 + -25 = $59 Mil.
Cash Flow from Operations was 116 + 410 + -126 + 1233 = $1,633 Mil.
|Accounts Receivable was $2,720 Mil.
Revenue was 3058 + 3078 + 3344 + 3991 = $13,471 Mil.
Gross Profit was 1806 + 1022 + 1721 + 2026 = $6,575 Mil.
Total Current Assets was $4,415 Mil.
Total Assets was $22,095 Mil.
Property, Plant and Equipment(Net PPE) was $937 Mil.
Depreciation, Depletion and Amortization(DDA) was $5,019 Mil.
Selling, General & Admin. Expense(SGA) was $2,883 Mil.
Total Current Liabilities was $3,830 Mil.
Long-Term Debt was $12,816 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)|
|=||(2973 / 13050)||/||(2720 / 13471)|
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)|
|=||(6575 / 13471)||/||(6291 / 13050)|
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 - (4609 + 852) / 22605)||/||(1 - (4415 + 937) / 22095)|
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))|
|=||(5019 / (5019 + 937))||/||(4923 / (4923 + 852))|
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)|
|=||(2822 / 13050)||/||(2883 / 13471)|
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)|
|=||((10996 + 4635) / 22605)||/||((12816 + 3830) / 22095)|
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|
|=||(2068 - 59||-||1633)||/||22605|
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 -2.28 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