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Wal-Mart Stores Inc (NYSE:WMT)
Beneish M-Score
-2.69 (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 -2.69 suggests that the company is not a manipulator.

WMT' s 10-Year Beneish M-Score Range
Min: -3.33   Max: -1.72
Current: -2.69

-3.33
-1.72

During the past 13 years, the highest Beneish M-Score of Wal-Mart Stores Inc was -1.72. The lowest was -3.33. 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 * 0.9703+0.528 * 1.0022+0.404 * 0.9908+0.892 * 1.0148+0.115 * 0.9742
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0152+4.679 * -0.0418-0.327 * 0.9827
=-2.69

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

This Year (Apr14) TTM:Last Year (Apr13) TTM:
Accounts Receivable was $6,096 Mil.
Revenue was 114960 + 129706 + 115688 + 116945 = $477,299 Mil.
Gross Profit was 28246 + 31735 + 29001 + 29490 = $118,472 Mil.
Total Current Assets was $59,687 Mil.
Total Assets was $202,746 Mil.
Property, Plant and Equipment(Net PPE) was $117,643 Mil.
Depreciation, Depletion and Amortization(DDA) was $8,926 Mil.
Selling, General & Admin. Expense(SGA) was $91,829 Mil.
Total Current Liabilities was $67,942 Mil.
Long-Term Debt was $48,441 Mil.
Net Income was 3593 + 4431 + 3738 + 4069 = $15,831 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 5939 + 9937 + 2069 + 6357 = $24,302 Mil.
Accounts Receivable was $6,191 Mil.
Revenue was 114187 + 127919 + 113929 + 114296 = $470,331 Mil.
Gross Profit was 28160 + 31791 + 28412 + 28639 = $117,002 Mil.
Total Current Assets was $60,176 Mil.
Total Assets was $202,187 Mil.
Property, Plant and Equipment(Net PPE) was $116,431 Mil.
Depreciation, Depletion and Amortization(DDA) was $8,589 Mil.
Selling, General & Admin. Expense(SGA) was $89,132 Mil.
Total Current Liabilities was $73,552 Mil.
Long-Term Debt was $44,551 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)
=(6096 / 477299) / (6191 / 470331)
=0.01277187 / 0.01316307
=0.9703

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)
=(31735 / 470331) / (28246 / 477299)
=0.24876523 / 0.24821338
=1.0022

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 - (59687 + 117643) / 202746) / (1 - (60176 + 116431) / 202187)
=0.12535882 / 0.12651654
=0.9908

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
=477299 / 470331
=1.0148

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))
=(8589 / (8589 + 116431)) / (8926 / (8926 + 117643))
=0.06870101 / 0.0705228
=0.9742

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)
=(91829 / 477299) / (89132 / 470331)
=0.19239303 / 0.18950909
=1.0152

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)
=((48441 + 67942) / 202746) / ((44551 + 73552) / 202187)
=0.57403352 / 0.58412757
=0.9827

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
=(15831 - 0 - 24302) / 202746
=-0.0418

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 -2.69 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 1.22841.41610.96591.18420.99811.05441.18831.10111.0860.9718
GMI 0.97840.99310.98380.99480.99360.96651.00431.00971.00611.0019
AQI 0.96050.99610.98021.08180.9961.02050.98371.16730.9660.9611
SGI 1.11331.09611.10451.08651.07081.00641.03341.05951.04971.0152
DEPI 1.02291.07510.96580.9510.92881.00660.98850.980.99390.9706
SGAI 1.02221.01281.02131.01081.01851.03190.98490.99330.9931.0125
LVGI 1.00981.03260.95441.02960.97960.97891.05140.99850.98580.9978
TATA -0.0628-0.0697-0.0829-0.0728-0.0863-0.0698-0.0402-0.0442-0.0423-0.0353
M-score -2.49-2.35-2.82-2.56-2.83-2.76-2.48-2.47-2.56-2.68

Wal-Mart Stores Inc Quarterly Data

Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14
DSRI 1.08940.95521.10911.0861.07631.08861.09050.97130.97031.009
GMI 1.01121.01261.00931.00611.00230.9990.99651.0011.00221.0052
AQI 1.18670.95641.01330.9660.94633.23060.92190.96110.99080.2955
SGI 1.06931.06681.05511.04971.03191.02661.02221.01571.01481.0159
DEPI 0.97950.96981.00480.99390.98670.50510.97340.97060.97421.924
SGAI 0.99040.98670.9880.9930.99751.00271.00521.01341.01521.0131
LVGI 0.980.98460.97630.98581.00141.00221.00450.99780.98270.9601
TATA -0.0592-0.0505-0.0519-0.0423-0.0396-0.0406-0.0277-0.0353-0.0418-0.0395
M-score -2.53-2.71-2.55-2.56-2.59-1.72-2.55-2.68-2.69-2.81
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