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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 -2.66.
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 * 0.9771||+||0.528 * 0.7632||+||0.404 * 0.9779||+||0.892 * 1.087||+||0.115 * 1.1436|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9625||+||4.679 * -0.0209||-||0.327 * 1.0504|
|This Year (Mar15) TTM:||Last Year (Mar14) TTM:|
|Accounts Receivable was $370 Mil.|
Revenue was 631.293 + 755.027 + 873.579 + 791.143 = $3,051 Mil.
Gross Profit was 77.865 + 169.66 + 209.042 + 174.788 = $631 Mil.
Total Current Assets was $1,195 Mil.
Total Assets was $8,351 Mil.
Property, Plant and Equipment(Net PPE) was $3,084 Mil.
Depreciation, Depletion and Amortization(DDA) was $277 Mil.
Selling, General & Admin. Expense(SGA) was $273 Mil.
Total Current Liabilities was $703 Mil.
Long-Term Debt was $1,912 Mil.
Net Income was -39.678 + 38.021 + 66.939 + 45.967 = $111 Mil.
Non Operating Income was 0.979 + -0.923 + -0.593 + 1.798 = $1 Mil.
Cash Flow from Operations was 19.154 + 110.61 + 126.826 + 27.872 = $284 Mil.
|Accounts Receivable was $348 Mil.
Revenue was 574.42 + 680.246 + 813.568 + 738.733 = $2,807 Mil.
Gross Profit was 34.092 + 117.347 + 158.983 + 132.895 = $443 Mil.
Total Current Assets was $1,054 Mil.
Total Assets was $7,872 Mil.
Property, Plant and Equipment(Net PPE) was $2,893 Mil.
Depreciation, Depletion and Amortization(DDA) was $301 Mil.
Selling, General & Admin. Expense(SGA) was $261 Mil.
Total Current Liabilities was $341 Mil.
Long-Term Debt was $2,007 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)|
|=||(369.952 / 3051.042)||/||(348.337 / 2806.967)|
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)|
|=||(169.66 / 2806.967)||/||(77.865 / 3051.042)|
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 - (1194.665 + 3084.093) / 8350.615)||/||(1 - (1053.742 + 2893.29) / 7872.235)|
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))|
|=||(300.889 / (300.889 + 2893.29))||/||(276.842 / (276.842 + 3084.093))|
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)|
|=||(272.932 / 3051.042)||/||(260.891 / 2806.967)|
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)|
|=||((1912.455 + 703.336) / 8350.615)||/||((2006.782 + 340.868) / 7872.235)|
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|
|=||(111.249 - 1.261||-||284.462)||/||8350.615|
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 -2.65 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