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Wal-Mart Stores Inc (NYSE:WMT)
Beneish M-Score
-2.63 (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 -2.63 suggests that the company is not a manipulator.

WMT' s 10-Year Beneish M-Score Range
Min: -3.32   Max: -1.84
Current: -2.63

-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 -2.68.


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 * 1.0079+0.528 * 1.0035+0.404 * 1.0111+0.892 * 1.0169+0.115 * 0.985
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0148+4.679 * -0.0395-0.327 * 0.9601
=-2.63

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

This Year (Jul14) TTM:Last Year (Jul13) TTM:
Accounts Receivable was $6,146 Mil.
Revenue was 120125 + 114960 + 129706 + 115688 = $480,479 Mil.
Gross Profit was 30115 + 28246 + 31735 + 29001 = $119,097 Mil.
Total Current Assets was $59,632 Mil.
Total Assets was $203,985 Mil.
Property, Plant and Equipment(Net PPE) was $118,723 Mil.
Depreciation, Depletion and Amortization(DDA) was $8,995 Mil.
Selling, General & Admin. Expense(SGA) was $92,507 Mil.
Total Current Liabilities was $67,152 Mil.
Long-Term Debt was $45,699 Mil.
Net Income was 4093 + 3593 + 4431 + 3738 = $15,855 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 5961 + 5939 + 9937 + 2069 = $23,906 Mil.
Accounts Receivable was $5,996 Mil.
Revenue was 116830 + 114070 + 127776 + 113800 = $472,476 Mil.
Gross Profit was 29410 + 28079 + 31705 + 28330 = $117,524 Mil.
Total Current Assets was $60,002 Mil.
Total Assets was $200,969 Mil.
Property, Plant and Equipment(Net PPE) was $115,994 Mil.
Depreciation, Depletion and Amortization(DDA) was $8,647 Mil.
Selling, General & Admin. Expense(SGA) was $89,636 Mil.
Total Current Liabilities was $72,214 Mil.
Long-Term Debt was $43,585 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)
=(6146 / 480479) / (5996 / 472476)
=0.0127914 / 0.01269059
=1.0079

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)
=(28246 / 472476) / (30115 / 480479)
=0.24874068 / 0.2478714
=1.0035

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 - (59632 + 118723) / 203985) / (1 - (60002 + 115994) / 200969)
=0.12564649 / 0.12426295
=1.0111

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
=480479 / 472476
=1.0169

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))
=(8647 / (8647 + 115994)) / (8995 / (8995 + 118723))
=0.06937525 / 0.0704286
=0.985

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)
=(92507 / 480479) / (89636 / 472476)
=0.19253079 / 0.18971546
=1.0148

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)
=((45699 + 67152) / 203985) / ((43585 + 72214) / 200969)
=0.55323186 / 0.5762033
=0.9601

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
=(15855 - 0 - 23906) / 203985
=-0.0395

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 -2.63 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 1.24431.36780.98811.18041.00351.05121.18831.10111.08720.9707
GMI 0.97620.99490.98480.99520.98120.97791.00111.01291.00771.0002
AQI 0.97031.08420.89331.24840.86531.02050.98371.16730.9660.9611
SGI 1.09911.09771.11621.08641.06841.00951.03341.05951.04861.0163
DEPI 1.05841.02820.96830.92070.95941.00660.98850.980.99640.9682
SGAI 1.01661.01191.02691.01091.03391.01730.9890.98910.99131.0142
LVGI 1.0061.03280.95741.02770.97940.97891.05140.99850.98580.9978
TATA -0.0632-0.0736-0.081-0.0721-0.0596-0.0698-0.0402-0.0442-0.0423-0.0353
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

Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14
DSRI 1.08940.95521.10951.08671.07721.08971.0910.97120.96971.0079
GMI 1.01281.01331.01051.00691.00361.00080.99741.00111.00141.0035
AQI 1.18670.95641.01330.9660.94630.9440.92190.96110.99081.0111
SGI 1.06931.06671.05481.0491.03111.02561.02181.01581.01541.0169
DEPI 1.19791.18181.00680.99640.98990.9850.9720.96820.97030.985
SGAI 0.98840.98570.98660.99220.99621.00091.00421.01331.0161.0148
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 -2.50-2.68-2.55-2.56-2.59-2.59-2.54-2.68-2.69-2.63
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