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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.
Wright Medical Group Inc has a M-score of -4.29 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Wright Medical Group Inc was -1.15. The lowest was -4.29. 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 Wright Medical Group 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 * 0.4239||+||0.528 * 1.0194||+||0.404 * 1.0482||+||0.892 * 1.1819||+||0.115 * 0.8597|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.264||+||4.679 * -0.2938||-||0.327 * 1.1164|
|This Year (Mar14) TTM:||Last Year (Mar13) TTM:|
|Accounts Receivable was $50.8 Mil.|
Revenue was 71.062 + 67.824 + 57.641 + 60.572 = $257.1 Mil.
Gross Profit was 53.645 + 50.401 + 43.604 + 46.008 = $193.7 Mil.
Total Current Assets was $541.9 Mil.
Total Assets was $1,023.8 Mil.
Property, Plant and Equipment(Net PPE) was $75.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $30.1 Mil.
Selling, General & Admin. Expense(SGA) was $248.7 Mil.
Total Current Liabilities was $110.5 Mil.
Long-Term Debt was $273.3 Mil.
Net Income was -30.42 + -135.029 + -130.02 + -17.331 = $-312.8 Mil.
Non Operating Income was -15.286 + 2.552 + 64.019 + -4.577 = $46.7 Mil.
Cash Flow from Operations was -27.24 + -42.322 + -0.034 + 10.923 = $-58.7 Mil.
|Accounts Receivable was $101.4 Mil.
Revenue was 56.293 + 58.38 + 50.888 + 51.964 = $217.5 Mil.
Gross Profit was 42.596 + 45.058 + 39.184 + 40.185 = $167.0 Mil.
Total Current Assets was $619.8 Mil.
Total Assets was $1,215.7 Mil.
Property, Plant and Equipment(Net PPE) was $135.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $44.0 Mil.
Selling, General & Admin. Expense(SGA) was $166.5 Mil.
Total Current Liabilities was $147.5 Mil.
Long-Term Debt was $260.6 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)|
|=||(50.778 / 257.099)||/||(101.35 / 217.525)|
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)|
|=||(50.401 / 217.525)||/||(53.645 / 257.099)|
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 - (541.902 + 75.601) / 1023.849)||/||(1 - (619.832 + 135.607) / 1215.747)|
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))|
|=||(44.003 / (44.003 + 135.607))||/||(30.132 / (30.132 + 75.601))|
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)|
|=||(248.724 / 257.099)||/||(166.481 / 217.525)|
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)|
|=||((273.271 + 110.453) / 1023.849)||/||((260.645 + 147.504) / 1215.747)|
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|
|=||(-312.8 - 46.708||-||-58.673)||/||1023.849|
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.
Wright Medical Group Inc has a M-score of -4.29 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
Wright Medical Group Inc Annual Data
Wright Medical Group Inc Quarterly Data