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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 22.80. The lowest was -3.68. And the median was -2.64.
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 * 0.4245||+||0.528 * 0.9903||+||0.404 * 1.859||+||0.892 * 1.0447||+||0.115 * 0.9572|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0363||+||4.679 * -0.0864||-||0.327 * 1.057|
|This Year (Oct14) TTM:||Last Year (Oct13) TTM:|
|Accounts Receivable was $17 Mil.|
Revenue was 379.744 + 396.838 + 372.511 + 392.241 = $1,541 Mil.
Gross Profit was 102.803 + 108.997 + 100.437 + 105.358 = $418 Mil.
Total Current Assets was $158 Mil.
Total Assets was $451 Mil.
Property, Plant and Equipment(Net PPE) was $204 Mil.
Depreciation, Depletion and Amortization(DDA) was $23 Mil.
Selling, General & Admin. Expense(SGA) was $363 Mil.
Total Current Liabilities was $137 Mil.
Long-Term Debt was $45 Mil.
Net Income was 3.879 + 5.87 + 3.188 + 2.818 = $16 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 0.051 + 16.602 + 4.757 + 33.303 = $55 Mil.
|Accounts Receivable was $39 Mil.
Revenue was 357.046 + 376.323 + 359.808 + 382.175 = $1,475 Mil.
Gross Profit was 93.706 + 101.889 + 97.314 + 102.92 = $396 Mil.
Total Current Assets was $196 Mil.
Total Assets was $432 Mil.
Property, Plant and Equipment(Net PPE) was $191 Mil.
Depreciation, Depletion and Amortization(DDA) was $21 Mil.
Selling, General & Admin. Expense(SGA) was $335 Mil.
Total Current Liabilities was $124 Mil.
Long-Term Debt was $41 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)|
|=||(17.216 / 1541.334)||/||(38.816 / 1475.352)|
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)|
|=||(108.997 / 1475.352)||/||(102.803 / 1541.334)|
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 - (158.461 + 204.285) / 450.853)||/||(1 - (196.007 + 191.02) / 432.492)|
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))|
|=||(20.55 / (20.55 + 191.02))||/||(23.072 / (23.072 + 204.285))|
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)|
|=||(363.033 / 1541.334)||/||(335.326 / 1475.352)|
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)|
|=||((45.106 + 137.215) / 450.853)||/||((40.996 + 124.473) / 432.492)|
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|
|=||(15.755 - 0||-||54.713)||/||450.853|
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 -3.06 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
Village Super Market Inc Annual Data
Village Super Market Inc Quarterly Data