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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 Vulcan Materials Co was -1.81. The lowest was -3.12. And the median was -2.68.
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 Vulcan Materials Co 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 * 0.9961||+||0.528 * 0.7856||+||0.404 * 1.046||+||0.892 * 1.0817||+||0.115 * 1.033|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.6989||+||4.679 * -0.0095||-||0.327 * 0.8448|
|This Year (Sep14) TTM:||Last Year (Sep13) TTM:|
|Accounts Receivable was $480 Mil.|
Revenue was 873.579 + 791.143 + 574.42 + 680.246 = $2,919 Mil.
Gross Profit was 209.042 + 174.788 + 34.092 + 117.347 = $535 Mil.
Total Current Assets was $955 Mil.
Total Assets was $8,092 Mil.
Property, Plant and Equipment(Net PPE) was $3,069 Mil.
Depreciation, Depletion and Amortization(DDA) was $285 Mil.
Selling, General & Admin. Expense(SGA) was $264 Mil.
Total Current Liabilities was $365 Mil.
Long-Term Debt was $2,006 Mil.
Net Income was 66.939 + 45.967 + 53.995 + 9.082 = $176 Mil.
Non Operating Income was -0.593 + 1.798 + 2.825 + 2.57 = $7 Mil.
Cash Flow from Operations was 126.826 + 27.872 + -4.972 + 96.487 = $246 Mil.
|Accounts Receivable was $445 Mil.
Revenue was 813.568 + 738.733 + 538.162 + 608.431 = $2,699 Mil.
Gross Profit was 158.983 + 132.895 + 17.655 + 79.206 = $389 Mil.
Total Current Assets was $1,101 Mil.
Total Assets was $8,310 Mil.
Property, Plant and Equipment(Net PPE) was $3,214 Mil.
Depreciation, Depletion and Amortization(DDA) was $309 Mil.
Selling, General & Admin. Expense(SGA) was $349 Mil.
Total Current Liabilities was $359 Mil.
Long-Term Debt was $2,523 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)|
|=||(479.748 / 2919.388)||/||(445.23 / 2698.894)|
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)|
|=||(174.788 / 2698.894)||/||(209.042 / 2919.388)|
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 - (954.618 + 3068.57) / 8091.538)||/||(1 - (1100.961 + 3214.46) / 8310.056)|
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))|
|=||(309.445 / (309.445 + 3214.46))||/||(285.089 / (285.089 + 3068.57))|
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)|
|=||(263.824 / 2919.388)||/||(348.995 / 2698.894)|
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)|
|=||((2005.968 + 364.812) / 8091.538)||/||((2523.389 + 358.643) / 8310.056)|
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|
|=||(175.983 - 6.6||-||246.213)||/||8091.538|
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.
Vulcan Materials Co has a M-score of -2.44 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
Vulcan Materials Co Annual Data
Vulcan Materials Co Quarterly Data