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Beneish M-Score 0.86 higher than -2.22, which implies that it might have manipulated its financial results.
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 22.77. The lowest was -3.74. And the median was -2.65.
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 * 4.8992||+||0.528 * 1.0032||+||0.404 * 0.7356||+||0.892 * 1.0153||+||0.115 * 0.9615|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.996||+||4.679 * -0.0357||-||0.327 * 0.944|
* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.
|This Year (Jan17) TTM:||Last Year (Jan16) TTM:|
|Accounts Receivable was $34 Mil.|
Revenue was 412.215 + 389.692 + 437.301 + 387.905 = $1,627 Mil.
Gross Profit was 111.238 + 104.648 + 120.08 + 106.738 = $443 Mil.
Total Current Assets was $179 Mil.
Total Assets was $450 Mil.
Property, Plant and Equipment(Net PPE) was $202 Mil.
Depreciation, Depletion and Amortization(DDA) was $24 Mil.
Selling, General & Admin. Expense(SGA) was $376 Mil.
Total Current Liabilities was $93 Mil.
Long-Term Debt was $43 Mil.
Net Income was 5.992 + 4.109 + 8.448 + 5.882 = $24 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 27.463 + -12.317 + 17.42 + 7.94 = $41 Mil.
|Accounts Receivable was $7 Mil.
Revenue was 420.17 + 389.529 + 405.754 + 387.1 = $1,603 Mil.
Gross Profit was 112.726 + 105.487 + 112.088 + 107.098 = $437 Mil.
Total Current Assets was $148 Mil.
Total Assets was $443 Mil.
Property, Plant and Equipment(Net PPE) was $203 Mil.
Depreciation, Depletion and Amortization(DDA) was $23 Mil.
Selling, General & Admin. Expense(SGA) was $371 Mil.
Total Current Liabilities was $98 Mil.
Long-Term Debt was $44 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)|
|=||(33.651 / 1627.113)||/||(6.765 / 1602.553)|
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)|
|=||(437.399 / 1602.553)||/||(442.704 / 1627.113)|
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 - (178.973 + 202.104) / 449.982)||/||(1 - (147.827 + 203.141) / 443.235)|
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))|
|=||(23.451 / (23.451 + 203.141))||/||(24.379 / (24.379 + 202.104))|
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)|
|=||(375.544 / 1627.113)||/||(371.376 / 1602.553)|
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)|
|=||((43.14 + 93.233) / 449.982)||/||((43.977 + 98.324) / 443.235)|
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|
|=||(24.431 - 0||-||40.506)||/||449.982|
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 0.86 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