Switch to:
Wal-Mart Stores Inc (NYSE:WMT)
Beneish M-Score
-2.77 (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 -2.77 suggests that the company is not a manipulator.

WMT' s 10-Year Beneish M-Score Range
Min: -3.09   Max: -2.07
Current: -2.77

-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 -2.68.


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 * 0.9956+0.528 * 0.9999+0.404 * 0.9313+0.892 * 1.0196+0.115 * 0.9597
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0029+4.679 * -0.0599-0.327 * 0.9615
=-2.77

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

This Year (Jan15) TTM:Last Year (Jan14) TTM:
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 $203,706 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 $65,272 Mil.
Long-Term Debt was $43,692 Mil.
Net Income was 4966 + 3711 + 4093 + 3593 = $16,363 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 13094 + 3570 + 5961 + 5939 = $28,564 Mil.
Accounts Receivable was $6,677 Mil.
Revenue was 129706 + 115688 + 116830 + 114070 = $476,294 Mil.
Gross Profit was 31735 + 29001 + 29410 + 28079 = $118,225 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 $91,353 Mil.
Total Current Liabilities was $69,345 Mil.
Long-Term Debt was $44,559 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)
=(6778 / 485651) / (6677 / 476294)
=0.01395652 / 0.01401865
=0.9956

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)
=(29754 / 476294) / (32450 / 485651)
=0.24821854 / 0.2482544
=0.9999

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 - (63278 + 116655) / 203706) / (1 - (61185 + 117907) / 204751)
=0.1167025 / 0.12531807
=0.9313

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
=485651 / 476294
=1.0196

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))
=(8870 / (8870 + 117907)) / (9173 / (9173 + 116655))
=0.06996537 / 0.0729011
=0.9597

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)
=(93418 / 485651) / (91353 / 476294)
=0.19235624 / 0.1917996
=1.0029

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)
=((43692 + 65272) / 203706) / ((44559 + 69345) / 204751)
=0.53490815 / 0.55630498
=0.9615

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
=(16363 - 0 - 28564) / 203706
=-0.0599

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 -2.77 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

Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15
DSRI 1.36780.98811.18041.00351.05161.1881.10111.08720.97070.9956
GMI 0.99490.98480.99520.98120.97681.00221.01291.00771.00020.9999
AQI 1.08420.89331.24840.86531.02230.9821.16730.9660.96110.9313
SGI 1.09771.11621.08641.06841.00921.03371.05951.04861.01631.0196
DEPI 1.02820.96830.92070.95941.00660.98850.980.99640.96820.9597
SGAI 1.01191.02691.01091.03391.0180.98830.98910.99131.01421.0029
LVGI 1.03280.95741.02770.97940.98041.04970.99850.98580.99780.9615
TATA -0.0736-0.081-0.0721-0.0596-0.0697-0.0402-0.0442-0.0423-0.0353-0.0599
M-score -2.38-2.81-2.50-2.76-2.75-2.49-2.47-2.56-2.68-2.77

Wal-Mart Stores Inc Quarterly Data

Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14Jan15
DSRI 1.10951.08671.07721.08971.0910.97120.96971.00790.96230.9956
GMI 1.01051.00691.00361.00080.99741.00111.00141.00351.00580.9999
AQI 1.01330.9660.94630.9440.92190.96110.99081.01110.97190.9313
SGI 1.05481.0491.03111.02561.02181.01581.01541.01691.01991.0196
DEPI 1.00680.99640.98990.9850.9720.96820.97030.9850.96370.9597
SGAI 0.98660.99220.99621.00091.00421.01331.0161.01481.01551.0029
LVGI 0.97630.98581.00141.00221.00450.99780.98270.96010.96370.9615
TATA -0.0519-0.0423-0.0396-0.0406-0.0277-0.0353-0.0418-0.0395-0.0461-0.0599
M-score -2.55-2.56-2.59-2.59-2.54-2.68-2.69-2.63-2.72-2.77
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
FEEDBACK