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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 Village Super Market Inc was 2.45. The lowest was -3.50. And the median was -2.71.
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 Village Super Market 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 * 1.2427||+||0.528 * 0.9836||+||0.404 * 1.096||+||0.892 * 1.0429||+||0.115 * 0.9586|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9854||+||4.679 * 0.0303||-||0.327 * 0.775|
|This Year (Jul15) TTM:||Last Year (Jul14) TTM:|
|Accounts Receivable was $17 Mil.|
Revenue was 405.754 + 387.1 + 411.191 + 379.744 = $1,584 Mil.
Gross Profit was 112.088 + 107.098 + 111.126 + 102.803 = $433 Mil.
Total Current Assets was $136 Mil.
Total Assets was $434 Mil.
Property, Plant and Equipment(Net PPE) was $207 Mil.
Depreciation, Depletion and Amortization(DDA) was $23 Mil.
Selling, General & Admin. Expense(SGA) was $366 Mil.
Total Current Liabilities was $96 Mil.
Long-Term Debt was $44 Mil.
Net Income was 6.932 + 13.206 + 6.603 + 3.879 = $31 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 9.944 + -28.096 + 35.569 + 0.051 = $17 Mil.
|Accounts Receivable was $13 Mil.
Revenue was 396.838 + 372.511 + 392.241 + 357.046 = $1,519 Mil.
Gross Profit was 108.997 + 100.437 + 105.358 + 93.706 = $408 Mil.
Total Current Assets was $163 Mil.
Total Assets was $457 Mil.
Property, Plant and Equipment(Net PPE) was $207 Mil.
Depreciation, Depletion and Amortization(DDA) was $22 Mil.
Selling, General & Admin. Expense(SGA) was $356 Mil.
Total Current Liabilities was $146 Mil.
Long-Term Debt was $45 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)|
|=||(16.748 / 1583.789)||/||(12.923 / 1518.636)|
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)|
|=||(107.098 / 1518.636)||/||(112.088 / 1583.789)|
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 - (135.911 + 206.594) / 433.902)||/||(1 - (162.786 + 206.72) / 457.412)|
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))|
|=||(22.274 / (22.274 + 206.72))||/||(23.33 / (23.33 + 206.594))|
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)|
|=||(366.254 / 1583.789)||/||(356.397 / 1518.636)|
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)|
|=||((44.425 + 96.164) / 433.902)||/||((45.242 + 146.004) / 457.412)|
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|
|=||(30.62 - 0||-||17.468)||/||433.902|
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.
Village Super Market Inc has a M-score of -1.98 signals that the company is likely to 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
Village Super Market Inc Annual Data
Village Super Market Inc Quarterly Data