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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.
Vulcan Materials Co has a M-score of -2.56 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Vulcan Materials Co was -1.83. The lowest was -3.12. And the median was -2.67.
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 * 0.9812||+||0.528 * 0.804||+||0.404 * 1.0073||+||0.892 * 1.0938||+||0.115 * 0.9758|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.6938||+||4.679 * -0.0318||-||0.327 * 0.8268|
* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.
|This Year (Jun14) TTM:||Last Year (Jun13) TTM:|
|Accounts Receivable was $434 Mil.|
Revenue was 791.143 + 574.42 + 680.246 + 813.568 = $2,859 Mil.
Gross Profit was 174.788 + 34.092 + 117.347 + 158.983 = $485 Mil.
Total Current Assets was $1,102 Mil.
Total Assets was $7,934 Mil.
Property, Plant and Equipment(Net PPE) was $2,902 Mil.
Depreciation, Depletion and Amortization(DDA) was $292 Mil.
Selling, General & Admin. Expense(SGA) was $264 Mil.
Total Current Liabilities was $349 Mil.
Long-Term Debt was $2,006 Mil.
Net Income was 45.967 + 53.995 + 9.082 + 41.363 = $150 Mil.
Non Operating Income was 1.798 + 2.825 + -42.336 + 15.586 = $-22 Mil.
Cash Flow from Operations was 27.872 + -4.972 + 96.487 + 305.357 = $425 Mil.
|Accounts Receivable was $405 Mil.
Revenue was 738.733 + 538.162 + 608.431 + 728.861 = $2,614 Mil.
Gross Profit was 132.895 + 17.655 + 79.206 + 126.923 = $357 Mil.
Total Current Assets was $912 Mil.
Total Assets was $8,120 Mil.
Property, Plant and Equipment(Net PPE) was $3,215 Mil.
Depreciation, Depletion and Amortization(DDA) was $315 Mil.
Selling, General & Admin. Expense(SGA) was $347 Mil.
Total Current Liabilities was $392 Mil.
Long-Term Debt was $2,524 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)|
|=||(434.332 / 2859.377)||/||(404.682 / 2614.187)|
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)|
|=||(34.092 / 2614.187)||/||(174.788 / 2859.377)|
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 - (1101.984 + 2901.762) / 7933.898)||/||(1 - (911.649 + 3215.341) / 8120.224)|
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))|
|=||(315.233 / (315.233 + 3215.341))||/||(292.253 / (292.253 + 2901.762))|
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)|
|=||(263.604 / 2859.377)||/||(347.376 / 2614.187)|
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)|
|=||((2006.379 + 349.405) / 7933.898)||/||((2524.42 + 391.769) / 8120.224)|
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|
|=||(150.407 - -22.127||-||424.744)||/||7933.898|
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 -2.56 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