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Wal-Mart Stores Inc (NYSE:WMT)
Beneish M-Score
-2.96 (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 -2.96 suggests that the company is not a manipulator.

WMT' s Beneish M-Score Range Over the Past 10 Years
Min: -2.99   Max: -2.05
Current: -2.96

-2.99
-2.05

During the past 13 years, the highest Beneish M-Score of Wal-Mart Stores Inc was -2.05. The lowest was -2.99. And the median was -2.67.


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 * 0.8358+0.528 * 0.988+0.404 * 0.9879+0.892 * 0.9927+0.115 * 0.9714
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0464+4.679 * -0.0636-0.327 * 1.0187
=-2.96

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

This Year (Jan16) TTM:Last Year (Jan15) TTM:
Accounts Receivable was $5,624 Mil.
Revenue was 129667 + 117408 + 120229 + 114826 = $482,130 Mil.
Gross Profit was 32668 + 29962 + 30173 + 28343 = $121,146 Mil.
Total Current Assets was $60,239 Mil.
Total Assets was $199,581 Mil.
Property, Plant and Equipment(Net PPE) was $116,516 Mil.
Depreciation, Depletion and Amortization(DDA) was $9,454 Mil.
Selling, General & Admin. Expense(SGA) was $97,041 Mil.
Total Current Liabilities was $64,619 Mil.
Long-Term Debt was $44,030 Mil.
Net Income was 4574 + 3304 + 3475 + 3341 = $14,694 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 12384 + 4903 + 5656 + 4446 = $27,389 Mil.
Accounts Receivable was $6,778 Mil.
Revenue was 131565 + 119001 + 120125 + 114960 = $485,651 Mil.
Gross Profit was 32450 + 29754 + 30115 + 28246 = $120,565 Mil.
Total Current Assets was $63,278 Mil.
Total Assets was $203,490 Mil.
Property, Plant and Equipment(Net PPE) was $116,655 Mil.
Depreciation, Depletion and Amortization(DDA) was $9,173 Mil.
Selling, General & Admin. Expense(SGA) was $93,418 Mil.
Total Current Liabilities was $65,253 Mil.
Long-Term Debt was $43,495 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)
=(5624 / 482130) / (6778 / 485651)
=0.0116649 / 0.01395652
=0.8358

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)
=(29962 / 485651) / (32668 / 482130)
=0.2482544 / 0.25127248
=0.988

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 - (60239 + 116516) / 199581) / (1 - (63278 + 116655) / 203490)
=0.1143696 / 0.1157649
=0.9879

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
=482130 / 485651
=0.9927

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))
=(9173 / (9173 + 116655)) / (9454 / (9454 + 116516))
=0.0729011 / 0.07504961
=0.9714

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)
=(97041 / 482130) / (93418 / 485651)
=0.20127559 / 0.19235624
=1.0464

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)
=((44030 + 64619) / 199581) / ((43495 + 65253) / 203490)
=0.54438549 / 0.53441447
=1.0187

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
=(14694 - 0 - 27389) / 199581
=-0.0636

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 -2.96 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 0.98811.18041.00351.05121.18831.10221.08610.97070.99560.8358
GMI 0.98480.99520.98120.97791.00431.01141.00591.00020.99990.988
AQI 0.89331.24840.86531.02230.9821.16730.9660.96110.92380.9879
SGI 1.11621.08641.06841.00951.03341.05851.04961.01631.01960.9927
DEPI 0.96830.92070.95941.00660.98850.98270.99370.96820.95970.9714
SGAI 1.02691.01091.03391.01730.98490.99150.99311.01421.00291.0464
LVGI 0.95741.02770.97940.98041.04970.99850.98580.99780.96071.0187
TATA -0.0572-0.0466-0.0596-0.0699-0.0402-0.0442-0.0423-0.0353-0.06-0.0636
M-score -2.70-2.38-2.76-2.75-2.49-2.47-2.56-2.68-2.77-2.96

Wal-Mart Stores Inc Quarterly Data

Oct13Jan14Apr14Jul14Oct14Jan15Apr15Jul15Oct15Jan16
DSRI 1.090.97120.96971.00790.96230.99560.93720.84920.82250.8358
GMI 0.99571.00111.00141.00351.00580.99990.99830.99710.99160.988
AQI 0.92190.96110.9831.00340.96420.92380.91840.96810.95990.9879
SGI 1.02271.01581.01541.01691.01991.01961.01751.01071.00050.9927
DEPI 0.96940.96820.97030.9850.96370.95970.9540.95240.97950.9714
SGAI 1.0061.01331.0161.01481.01551.00291.00711.01351.02321.0464
LVGI 1.00450.99780.98190.95930.96290.96070.97780.98471.00241.0187
TATA -0.0277-0.0353-0.0418-0.0395-0.0461-0.06-0.0546-0.0568-0.0634-0.0636
M-score -2.55-2.68-2.70-2.63-2.72-2.77-2.81-2.89-2.97-2.96
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