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Wal-Mart Stores Inc (NYSE:WMT)
Beneish M-Score
-2.68 (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 -2.68 suggests that the company is not a manipulator.

WMT' s 10-Year Beneish M-Score Range
Min: -3.09   Max: -2.07
Current: -2.68

-3.09
-2.07

During the past 13 years, the highest Beneish M-Score of Wal-Mart Stores Inc was -2.07. The lowest was -3.09. And the median was -2.64.


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 * 0.9707+0.528 * 1.0002+0.404 * 0.9611+0.892 * 1.0163+0.115 * 0.9682
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0142+4.679 * -0.0353-0.327 * 0.9978
=-2.68

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

This Year (Jan14) TTM:Last Year (Jan13) TTM:
Accounts Receivable was $6,677 Mil.
Revenue was 129706 + 115688 + 116945 + 114187 = $476,526 Mil.
Gross Profit was 31735 + 29001 + 29490 + 28160 = $118,386 Mil.
Total Current Assets was $61,185 Mil.
Total Assets was $204,751 Mil.
Property, Plant and Equipment(Net PPE) was $117,907 Mil.
Depreciation, Depletion and Amortization(DDA) was $8,870 Mil.
Selling, General & Admin. Expense(SGA) was $91,480 Mil.
Total Current Liabilities was $69,345 Mil.
Long-Term Debt was $44,559 Mil.
Net Income was 4431 + 3738 + 4069 + 3784 = $16,022 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 9937 + 2069 + 6357 + 4894 = $23,257 Mil.
Accounts Receivable was $6,768 Mil.
Revenue was 127776 + 113800 + 114282 + 113010 = $468,868 Mil.
Gross Profit was 31705 + 28330 + 28639 + 27832 = $116,506 Mil.
Total Current Assets was $59,940 Mil.
Total Assets was $203,105 Mil.
Property, Plant and Equipment(Net PPE) was $116,681 Mil.
Depreciation, Depletion and Amortization(DDA) was $8,478 Mil.
Selling, General & Admin. Expense(SGA) was $88,748 Mil.
Total Current Liabilities was $71,818 Mil.
Long-Term Debt was $41,417 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)
=(6677 / 476526) / (6768 / 468868)
=0.01401183 / 0.01443477
=0.9707

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)
=(29001 / 468868) / (31735 / 476526)
=0.24848358 / 0.24843555
=1.0002

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 - (61185 + 117907) / 204751) / (1 - (59940 + 116681) / 203105)
=0.12531807 / 0.13039561
=0.9611

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
=476526 / 468868
=1.0163

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))
=(8478 / (8478 + 116681)) / (8870 / (8870 + 117907))
=0.06773784 / 0.06996537
=0.9682

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)
=(91480 / 476526) / (88748 / 468868)
=0.19197274 / 0.18928142
=1.0142

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)
=((44559 + 69345) / 204751) / ((41417 + 71818) / 203105)
=0.55630498 / 0.55751951
=0.9978

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
=(16022 - 0 - 23257) / 204751
=-0.0353

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 -2.68 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

Jan05Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14
DSRI 1.24431.36780.98811.18041.00351.05161.1881.10111.08720.9707
GMI 0.97620.99490.98480.99520.98120.97681.00221.01291.00771.0002
AQI 0.97031.08420.89331.24840.86531.02230.9821.16730.9660.9611
SGI 1.09911.09771.11621.08641.06841.00921.03371.05951.04861.0163
DEPI 1.05841.02820.96830.92070.95941.00660.98850.980.99640.9682
SGAI 1.01661.01191.02691.01091.03391.0180.98830.98910.99131.0142
LVGI 1.0061.03280.95741.02770.97940.98041.04970.99850.98580.9978
TATA -0.0632-0.0736-0.081-0.0721-0.0596-0.0697-0.0402-0.0442-0.0423-0.0353
M-score -2.49-2.38-2.81-2.50-2.76-2.75-2.49-2.47-2.56-2.68

Wal-Mart Stores Inc Quarterly Data

Oct11Jan12Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14
DSRI 1.03561.10111.08940.95521.10951.08671.0771.08921.09050.9707
GMI 1.00861.01291.01361.01411.01051.00691.00320.99990.99661.0002
AQI 1.17021.16731.18670.95641.01330.9660.94630.9440.92190.9611
SGI 1.05021.05951.06931.06671.05481.0491.03131.02611.02231.0163
DEPI 0.96950.980.97950.96981.00680.99640.98910.98350.9720.9682
SGAI 0.98990.98910.98730.98460.98660.99220.99671.00181.00511.0142
LVGI 0.98280.99850.980.98460.97630.98581.00141.00221.00450.9978
TATA -0.0395-0.0442-0.0592-0.0505-0.0519-0.0423-0.0396-0.0406-0.0277-0.0353
M-score -2.51-2.47-2.52-2.70-2.55-2.56-2.59-2.59-2.55-2.68
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