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Wal-Mart Stores Inc (NYSE:WMT)
Beneish M-Score
-2.72 (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 -2.72 suggests that the company is not a manipulator.

WMT' s 10-Year Beneish M-Score Range
Min: -3.32   Max: -1.84
Current: -2.72

-3.32
-1.84

During the past 13 years, the highest Beneish M-Score of Wal-Mart Stores Inc was -1.84. The lowest was -3.32. And the median was -2.63.


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 * 0.9623+0.528 * 1.0058+0.404 * 0.9719+0.892 * 1.0199+0.115 * 0.9637
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0155+4.679 * -0.0461-0.327 * 0.9637
=-2.72

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

This Year (Oct14) TTM:Last Year (Oct13) TTM:
Accounts Receivable was $6,091 Mil.
Revenue was 119001 + 120125 + 114960 + 129706 = $483,792 Mil.
Gross Profit was 29754 + 30115 + 28246 + 31735 = $119,850 Mil.
Total Current Assets was $65,841 Mil.
Total Assets was $207,889 Mil.
Property, Plant and Equipment(Net PPE) was $117,492 Mil.
Depreciation, Depletion and Amortization(DDA) was $9,151 Mil.
Selling, General & Admin. Expense(SGA) was $93,305 Mil.
Total Current Liabilities was $71,560 Mil.
Long-Term Debt was $44,487 Mil.
Net Income was 3711 + 4093 + 3593 + 4431 = $15,828 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 3570 + 5961 + 5939 + 9937 = $25,407 Mil.
Accounts Receivable was $6,206 Mil.
Revenue was 115688 + 116830 + 114070 + 127776 = $474,364 Mil.
Gross Profit was 29001 + 29410 + 28079 + 31705 = $118,195 Mil.
Total Current Assets was $67,142 Mil.
Total Assets was $209,876 Mil.
Property, Plant and Equipment(Net PPE) was $117,227 Mil.
Depreciation, Depletion and Amortization(DDA) was $8,774 Mil.
Selling, General & Admin. Expense(SGA) was $90,090 Mil.
Total Current Liabilities was $77,021 Mil.
Long-Term Debt was $44,543 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)
=(6091 / 483792) / (6206 / 474364)
=0.01259012 / 0.01308278
=0.9623

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)
=(30115 / 474364) / (29754 / 483792)
=0.2491652 / 0.24773043
=1.0058

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 - (65841 + 117492) / 207889) / (1 - (67142 + 117227) / 209876)
=0.11812073 / 0.12153367
=0.9719

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
=483792 / 474364
=1.0199

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))
=(8774 / (8774 + 117227)) / (9151 / (9151 + 117492))
=0.06963437 / 0.07225824
=0.9637

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)
=(93305 / 483792) / (90090 / 474364)
=0.19286181 / 0.18991745
=1.0155

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)
=((44487 + 71560) / 207889) / ((44543 + 77021) / 209876)
=0.55821616 / 0.57921821
=0.9637

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
=(15828 - 0 - 25407) / 207889
=-0.0461

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 -2.72 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

Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14
DSRI 0.95521.10951.08671.07721.08971.0910.97120.96971.00790.9623
GMI 1.01411.01051.00691.00361.00080.99741.00111.00141.00351.0058
AQI 0.95641.01330.9660.94630.9440.92190.96110.99081.01110.9719
SGI 1.06671.05481.0491.03111.02561.02181.01581.01541.01691.0199
DEPI 0.96981.00680.99640.98990.9850.9720.96820.97030.9850.9637
SGAI 0.98460.98660.99220.99621.00091.00421.01331.0161.01481.0155
LVGI 0.98460.97630.98581.00141.00221.00450.99780.98270.96010.9637
TATA -0.0505-0.0519-0.0423-0.0396-0.0406-0.0277-0.0353-0.0418-0.0395-0.0461
M-score -2.70-2.55-2.56-2.59-2.59-2.54-2.68-2.69-2.63-2.72
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