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Wal-Mart Stores Inc (NYSE:WMT)
Beneish M-Score
-2.97 (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 -3.08 suggests that the company is not a manipulator.

WMT' s Beneish M-Score Range Over the Past 10 Years
Min: -3.32   Max: -1.84
Current: -2.97

-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 -2.65.


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 * 0.8266+0.528 * 0.9913+0.404 * 0.9599+0.892 * 0.9954+0.115 * 0.9795
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0352+4.679 * -0.0876-0.327 * 1.0024
=-3.08

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

This Year (Oct15) TTM:Last Year (Oct14) TTM:
Accounts Receivable was $5,012 Mil.
Revenue was 117408 + 120229 + 114826 + 0 = $352,463 Mil.
Gross Profit was 29962 + 30173 + 28343 + 0 = $88,478 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 $71,015 Mil.
Total Current Liabilities was $70,492 Mil.
Long-Term Debt was $44,198 Mil.
Net Income was 3304 + 3475 + 3341 + 0 = $10,120 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 4903 + 5656 + 4446 + 13094 = $28,099 Mil.
Accounts Receivable was $6,091 Mil.
Revenue was 119001 + 120125 + 114960 + 0 = $354,086 Mil.
Gross Profit was 29754 + 30115 + 28246 + 0 = $88,115 Mil.
Total Current Assets was $65,841 Mil.
Total Assets was $207,668 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 $68,917 Mil.
Total Current Liabilities was $71,540 Mil.
Long-Term Debt was $44,286 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)
=(5012 / 352463) / (6091 / 354086)
=0.01421993 / 0.01720204
=0.8266

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)
=(30173 / 354086) / (29962 / 352463)
=0.24885197 / 0.25102777
=0.9913

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 - (65112 + 116956) / 205144) / (1 - (65841 + 117492) / 207668)
=0.11248684 / 0.11718223
=0.9599

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
=352463 / 354086
=0.9954

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))
=(9151 / (9151 + 117492)) / (9315 / (9315 + 116956))
=0.07225824 / 0.07376991
=0.9795

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)
=(71015 / 352463) / (68917 / 354086)
=0.20148214 / 0.19463351
=1.0352

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)
=((44198 + 70492) / 205144) / ((44286 + 71540) / 207668)
=0.5590707 / 0.55774602
=1.0024

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
=(10120 - 0 - 28099) / 205144
=-0.0876

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 -3.08 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

Jul13Oct13Jan14Apr14Jul14Oct14Jan15Apr15Jul15Oct15
DSRI 1.09431.09710.97090.96961.00730.96070.99360.93610.85030.8266
GMI 1.00090.99630.99630.99670.99961.00281.00281.00070.9990.9913
AQI 0.9440.92190.96110.9831.00340.96420.93130.91840.96810.9599
SGI 1.02131.01611.01611.01561.01761.02161.02161.01861.00940.9954
DEPI 0.9850.9720.96820.97030.9850.96370.95970.9540.95240.9795
SGAI 0.99971.00431.00431.0081.00641.00741.00741.0131.02181.0352
LVGI 1.00221.00450.99780.98190.95930.96290.96150.97780.98471.0024
TATA -0.0685-0.0544-0.057-0.0637-0.0613-0.0675-0.0843-0.0793-0.0818-0.0876
M-score -2.72-2.67-2.78-2.80-2.73-2.82-2.88-2.93-3.01-3.08
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