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Wal-Mart Stores Inc (NYSE:WMT)
Beneish M-Score
-2.95 (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.

Wal-Mart Stores Inc has a M-score of -2.95 suggests that the company is not a manipulator.

WMT' s Beneish M-Score Range Over the Past 10 Years
Min: -3.13   Max: -1.84
Current: -2.95

-3.13
-1.84

During the past 13 years, the highest Beneish M-Score of Wal-Mart Stores Inc was -1.84. The lowest was -3.13. And the median was -2.62.


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 Wal-Mart Stores 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 * 0.8966+0.528 * 0.983+0.404 * 1.0184+0.892 * 0.9952+0.115 * 0.979
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0522+4.679 * -0.074-0.327 * 1.02
=-2.95

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Apr16) TTM:Last Year (Apr15) TTM:
Accounts Receivable was $5,187 Mil.
Revenue was 115904 + 129667 + 117408 + 120229 = $483,208 Mil.
Gross Profit was 29360 + 32668 + 29962 + 30173 = $122,163 Mil.
Total Current Assets was $59,097 Mil.
Total Assets was $198,705 Mil.
Property, Plant and Equipment(Net PPE) was $116,494 Mil.
Depreciation, Depletion and Amortization(DDA) was $9,523 Mil.
Selling, General & Admin. Expense(SGA) was $98,463 Mil.
Total Current Liabilities was $70,282 Mil.
Long-Term Debt was $43,393 Mil.
Net Income was 3079 + 4574 + 3304 + 3475 = $14,432 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 6193 + 12384 + 4903 + 5656 = $29,136 Mil.
Accounts Receivable was $5,813 Mil.
Revenue was 114826 + 131565 + 119001 + 120125 = $485,517 Mil.
Gross Profit was 28343 + 32450 + 29754 + 30115 = $120,662 Mil.
Total Current Assets was $62,133 Mil.
Total Assets was $200,747 Mil.
Property, Plant and Equipment(Net PPE) was $115,685 Mil.
Depreciation, Depletion and Amortization(DDA) was $9,242 Mil.
Selling, General & Admin. Expense(SGA) was $94,028 Mil.
Total Current Liabilities was $69,624 Mil.
Long-Term Debt was $42,964 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)
=(5187 / 483208) / (5813 / 485517)
=0.01073451 / 0.0119728
=0.8966

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)
=(120662 / 485517) / (122163 / 483208)
=0.24852271 / 0.25281659
=0.983

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 - (59097 + 116494) / 198705) / (1 - (62133 + 115685) / 200747)
=0.11632319 / 0.11421839
=1.0184

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
=483208 / 485517
=0.9952

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))
=(9242 / (9242 + 115685)) / (9523 / (9523 + 116494))
=0.0739792 / 0.07556917
=0.979

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)
=(98463 / 483208) / (94028 / 485517)
=0.20376939 / 0.19366572
=1.0522

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)
=((43393 + 70282) / 198705) / ((42964 + 69624) / 200747)
=0.57207921 / 0.56084524
=1.02

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
=(14432 - 0 - 29136) / 198705
=-0.074

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.

Wal-Mart Stores Inc has a M-score of -2.95 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 own currency.

Wal-Mart Stores Inc Annual Data

Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15Jan16
DSRI 0.99851.18031.00131.05441.18831.10111.0860.97180.99560.8358
GMI 0.98380.99480.99360.96651.00431.00971.00611.00190.99990.988
AQI 0.89331.24840.86531.02230.9821.16730.9660.96110.92380.9879
SGI 1.10451.08651.07081.00641.03341.05951.04971.01521.01960.9927
DEPI 0.98250.92070.95941.00660.98850.980.99390.97060.95970.9714
SGAI 1.02131.01081.01851.03190.98490.99330.9931.01251.00291.0464
LVGI 0.95741.02770.97940.98041.04970.99850.98580.99780.96071.0187
TATA -0.0586-0.0466-0.0596-0.0699-0.0402-0.0442-0.0423-0.0353-0.06-0.0636
M-score -2.71-2.38-2.75-2.76-2.49-2.47-2.56-2.68-2.77-2.96

Wal-Mart Stores Inc Quarterly Data

Jan14Apr14Jul14Oct14Jan15Apr15Jul15Oct15Jan16Apr16
DSRI 0.97120.96971.00790.96230.99560.93720.84920.82250.83580.8966
GMI 1.00111.00141.00351.00580.99990.99830.99710.99160.9880.983
AQI 0.96110.9831.00340.96420.92380.91840.96810.95990.98791.0184
SGI 1.01581.01541.01691.01991.01961.01751.01071.00050.99270.9952
DEPI 0.96820.97030.9850.96370.95970.9540.95240.97950.97140.979
SGAI 1.01331.0161.01481.01551.00291.00711.01351.02321.04641.0522
LVGI 0.99780.98190.95930.96290.96070.97780.98471.00241.01871.02
TATA -0.0353-0.0418-0.0395-0.0461-0.06-0.0546-0.0568-0.0634-0.0636-0.074
M-score -2.68-2.70-2.63-2.72-2.77-2.81-2.89-2.97-2.96-2.95
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