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VMware Inc (NYSE:VMW)
Beneish M-Score
-2.77 (As of Today)

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.

VMware Inc has a M-score of -2.77 suggests that the company is not a manipulator.

VMW' s Beneish M-Score Range Over the Past 10 Years
Min: -3.46   Max: -2.4
Current: -2.77

-3.46
-2.4

During the past 12 years, the highest Beneish M-Score of VMware Inc was -2.40. The lowest was -3.46. And the median was -2.77.


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 VMware 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 * 1.0234+0.528 * 0.9927+0.404 * 0.9803+0.892 * 1.0815+0.115 * 0.9205
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9314+4.679 * -0.0807-0.327 * 0.9821
=-2.77

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

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $1,119 Mil.
Revenue was 1778 + 1693 + 1589 + 1868 = $6,928 Mil.
Gross Profit was 1512 + 1432 + 1338 + 1601 = $5,883 Mil.
Total Current Assets was $9,555 Mil.
Total Assets was $15,869 Mil.
Property, Plant and Equipment(Net PPE) was $1,050 Mil.
Depreciation, Depletion and Amortization(DDA) was $350 Mil.
Selling, General & Admin. Expense(SGA) was $3,035 Mil.
Total Current Liabilities was $4,032 Mil.
Long-Term Debt was $1,500 Mil.
Net Income was 319 + 265 + 161 + 374 = $1,119 Mil.
Non Operating Income was -8 + 2 + -1 + 1 = $-6 Mil.
Cash Flow from Operations was 620 + 577 + 720 + 488 = $2,405 Mil.
Accounts Receivable was $1,011 Mil.
Revenue was 1672 + 1521 + 1511 + 1702 = $6,406 Mil.
Gross Profit was 1414 + 1271 + 1268 + 1447 = $5,400 Mil.
Total Current Assets was $8,662 Mil.
Total Assets was $14,791 Mil.
Property, Plant and Equipment(Net PPE) was $1,124 Mil.
Depreciation, Depletion and Amortization(DDA) was $336 Mil.
Selling, General & Admin. Expense(SGA) was $3,013 Mil.
Total Current Liabilities was $3,750 Mil.
Long-Term Debt was $1,500 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)
=(1119 / 6928) / (1011 / 6406)
=0.16151848 / 0.15782079
=1.0234

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)
=(5400 / 6406) / (5883 / 6928)
=0.84295973 / 0.84916282
=0.9927

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 - (9555 + 1050) / 15869) / (1 - (8662 + 1124) / 14791)
=0.33171592 / 0.33838145
=0.9803

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
=6928 / 6406
=1.0815

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))
=(336 / (336 + 1124)) / (350 / (350 + 1050))
=0.23013699 / 0.25
=0.9205

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)
=(3035 / 6928) / (3013 / 6406)
=0.43807737 / 0.47034031
=0.9314

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)
=((1500 + 4032) / 15869) / ((1500 + 3750) / 14791)
=0.3486042 / 0.35494558
=0.9821

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
=(1119 - -6 - 2405) / 15869
=-0.0807

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.

VMware Inc has a M-score of -2.77 suggests that the company will not 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.

VMware Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.77790.83941.46880.81511.08941.06650.93741.0750.9867
GMI 0.98760.99611.01950.9940.99080.98990.9811.01391.0035
AQI 0.51360.88771.08931.04640.93241.26020.85731.12940.9589
SGI 1.88351.41881.0761.41181.31841.22251.13071.1591.0888
DEPI 2.11570.99290.83240.86171.02091.0791.22071.14041.0918
SGAI 1.01011.00481.05530.9580.96691.00710.98151.09530.9822
LVGI 0.37260.83360.99380.95710.99720.97110.95191.18960.9897
TATA -0.124-0.1394-0.1578-0.1181-0.1572-0.1085-0.1257-0.0855-0.0568
M-score -2.35-2.90-2.70-2.81-2.87-2.61-3.03-2.67-2.68

VMware Inc Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 1.03441.04631.07491.03450.97030.9590.98641.02520.91681.0234
GMI 0.99171.00161.01371.01841.01941.01231.00370.99930.99240.9927
AQI 1.04321.05961.12940.93020.94710.97910.95890.97040.94390.9803
SGI 1.14981.15931.1591.15071.11811.10161.08921.07521.09171.0815
DEPI 1.27061.21211.14041.11921.09311.10641.09181.01450.9520.9205
SGAI 1.02791.05521.0951.08751.04511.02280.98290.96690.94580.9314
LVGI 1.18031.22841.18961.01931.01150.99660.98970.9590.92930.9821
TATA -0.1074-0.1056-0.0855-0.0834-0.0766-0.0593-0.0568-0.0611-0.0689-0.0807
M-score -2.84-2.82-2.67-2.73-2.77-2.70-2.68-2.67-2.80-2.77
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