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Wal-Mart Stores Inc (NYSE:WMT)
Beneish M-Score
-2.76 (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 -2.76 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: -2.76

-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 * 1.065+0.528 * 0.9757+0.404 * 1.2191+0.892 * 1.0012+0.115 * 0.9397
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.055+4.679 * -0.0849-0.327 * 1.0051
=-2.76

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Oct16) TTM:Last Year (Oct15) TTM:
Accounts Receivable was $5,344 Mil.
Revenue was 118179 + 120854 + 115904 + 129667 = $484,604 Mil.
Gross Profit was 30695 + 31369 + 29360 + 32668 = $124,092 Mil.
Total Current Assets was $63,401 Mil.
Total Assets was $206,857 Mil.
Property, Plant and Equipment(Net PPE) was $115,088 Mil.
Depreciation, Depletion and Amortization(DDA) was $9,805 Mil.
Selling, General & Admin. Expense(SGA) was $100,891 Mil.
Total Current Liabilities was $74,130 Mil.
Long-Term Debt was $42,108 Mil.
Net Income was 3034 + 3773 + 3079 + 4574 = $14,460 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 4713 + 8738 + 6193 + 12384 = $32,028 Mil.
Accounts Receivable was $5,012 Mil.
Revenue was 117408 + 120229 + 114826 + 131565 = $484,028 Mil.
Gross Profit was 29962 + 30173 + 28343 + 32450 = $120,928 Mil.
Total Current Assets was $65,112 Mil.
Total Assets was $205,144 Mil.
Property, Plant and Equipment(Net PPE) was $116,956 Mil.
Depreciation, Depletion and Amortization(DDA) was $9,315 Mil.
Selling, General & Admin. Expense(SGA) was $95,516 Mil.
Total Current Liabilities was $70,492 Mil.
Long-Term Debt was $44,198 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)
=(5344 / 484604) / (5012 / 484028)
=0.01102756 / 0.01035477
=1.065

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)
=(120928 / 484028) / (124092 / 484604)
=0.24983679 / 0.25606887
=0.9757

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 - (63401 + 115088) / 206857) / (1 - (65112 + 116956) / 205144)
=0.13713822 / 0.11248684
=1.2191

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
=484604 / 484028
=1.0012

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))
=(9315 / (9315 + 116956)) / (9805 / (9805 + 115088))
=0.07376991 / 0.0785072
=0.9397

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)
=(100891 / 484604) / (95516 / 484028)
=0.20819267 / 0.19733569
=1.055

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)
=((42108 + 74130) / 206857) / ((44198 + 70492) / 205144)
=0.56192442 / 0.5590707
=1.0051

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
=(14460 - 0 - 32028) / 206857
=-0.0849

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 -2.76 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 local exchange's currency.

Wal-Mart Stores Inc Annual Data

Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15Jan16
DSRI 0.98811.18041.00351.05161.1881.10221.08610.97070.99560.8358
GMI 0.98480.99520.98120.97681.00221.01471.00591.00020.99990.988
AQI 0.89331.24840.86531.02230.9821.16730.9660.96110.92380.9879
SGI 1.11621.08641.06841.00921.03371.05851.04961.01631.01960.9927
DEPI 0.96830.92070.95941.00660.98850.98270.99370.96820.95970.9714
SGAI 1.02691.01091.03391.0180.98830.98730.99311.01421.00291.0464
LVGI 0.95741.02770.97940.98041.04970.99850.98580.99780.96071.0187
TATA -0.0572-0.0466-0.0596-0.0697-0.0402-0.0442-0.0423-0.0353-0.06-0.0636
M-score -2.70-2.38-2.76-2.75-2.49-2.46-2.56-2.68-2.77-2.96

Wal-Mart Stores Inc Quarterly Data

Jul14Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16
DSRI 1.00790.96230.99560.93720.84920.82250.83580.89661.00371.065
GMI 1.00351.00580.99990.99830.99710.99160.9880.9830.9750.9757
AQI 1.00340.96420.92380.91840.96810.95990.98791.01841.01491.2191
SGI 1.01691.01991.01961.01751.01071.00050.99270.99520.99631.0012
DEPI 0.9850.96370.95970.9540.95240.97950.97140.9790.95370.9397
SGAI 1.01481.01551.00291.00711.01351.02321.04641.05221.05461.055
LVGI 0.95930.96290.96070.97780.98471.00241.01871.021.02931.0051
TATA -0.0395-0.0461-0.06-0.0546-0.0568-0.0634-0.0636-0.074-0.0884-0.0849
M-score -2.63-2.72-2.77-2.81-2.89-2.97-2.96-2.95-2.92-2.76
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