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GuruFocus has detected 4 Warning Signs with Village Super Market Inc $VLGEA.
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Village Super Market Inc (NAS:VLGEA)
Beneish M-Score
0.86 (As of Today)

Warning Sign:

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.

Village Super Market Inc has a M-score of 0.86 signals that the company is a manipulator.

VLGEA' s Beneish M-Score Range Over the Past 10 Years
Min: -3.74   Max: 22.77
Current: 0.86

-3.74
22.77

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.


Definition

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
=0.86

* 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

Measured as the ratio of days’ sales in receivables in year t to year t-1.

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)
=0.02068142 / 0.00422139
=4.8992

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.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(437.399 / 1602.553) / (442.704 / 1627.113)
=0.27293887 / 0.27207944
=1.0032

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

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)
=0.15312835 / 0.20816723
=0.7356

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.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=1627.113 / 1602.553
=1.0153

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))
=0.10349439 / 0.10764163
=0.9615

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)
=0.23080388 / 0.23174023
=0.996

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)
=0.30306323 / 0.32105091
=0.944

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(24.431 - 0 - 40.506) / 449.982
=-0.0357

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.


Related Terms

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


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Village Super Market Inc Annual Data

Jul07Jul08Jul09Jul10Jul11Jul12Jul13Jul14Jul15Jul16
DSRI 1.08340.99723.13930.36251.00031.09113.06050.3671.24270.7626
GMI 0.98370.99560.98911.00681.00810.9861.01481.00150.98361.0046
AQI 1.93471.01050.72551.02110.98041.04180.65891.82261.07690.9546
SGI 1.02911.07771.07121.04451.02941.09491.03811.02861.04291.0323
DEPI 0.97021.01681.02250.9810.91210.93770.99681.06040.95860.9497
SGAI 1.00040.9970.98861.00431.01450.97651.02391.03980.98540.9961
LVGI 0.92011.10680.97850.95041.1040.89321.03021.16190.76740.9888
TATA -0.0543-0.0746-0.0608-0.0278-0.1118-0.0293-0.063-0.10360.0305-0.0867
M-score -2.24-2.79-0.84-3.13-3.03-2.41-0.99-3.24-1.98-3.09

Village Super Market Inc Quarterly Data

Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16Jan17
DSRI 0.42450.17381.73811.24271.00821.26490.51370.76262.47074.8992
GMI 0.99030.98810.98120.98360.99070.99411.00171.00461.00671.0032
AQI 1.8591.8111.04781.07691.09481.11720.9960.95460.72530.7356
SGI 1.04471.05041.05121.04291.03391.02711.01811.03231.0261.0153
DEPI 0.95720.94070.92990.95860.98620.99890.98130.94970.96310.9615
SGAI 1.03630.99450.98750.98540.98211.00041.00290.99610.99520.996
LVGI 1.0471.0510.83090.76740.7890.77240.95280.98880.94450.944
TATA -0.0864-0.080.01270.03050.01920.0232-0.0759-0.0867-0.0488-0.0357
M-score -3.06-3.27-1.64-1.98-2.25-1.99-3.25-3.09-1.420.86
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