Switch to:
Wal-Mart Stores Inc (NYSE:WMT)
Beneish M-Score
-2.81 (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 -2.81 suggests that the company is not a manipulator.

WMT' s 10-Year Beneish M-Score Range
Min: -3.32   Max: -1.84
Current: -2.81

-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 * 0.9372+0.528 * 0.9983+0.404 * 0.9184+0.892 * 1.0175+0.115 * 0.954
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0071+4.679 * -0.0546-0.327 * 0.9778
=-2.81

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

This Year (Apr15) TTM:Last Year (Apr14) TTM:
Accounts Receivable was $5,813 Mil.
Revenue was 114826 + 131565 + 119001 + 120125 = $485,517 Mil.
Gross Profit was 28343 + 32450 + 29754 + 30115 = $120,662 Mil.
Total Current Assets was $62,133 Mil.
Total Assets was $200,747 Mil.
Property, Plant and Equipment(Net PPE) was $115,685 Mil.
Depreciation, Depletion and Amortization(DDA) was $9,242 Mil.
Selling, General & Admin. Expense(SGA) was $94,028 Mil.
Total Current Liabilities was $69,624 Mil.
Long-Term Debt was $42,964 Mil.
Net Income was 3341 + 4966 + 3711 + 4093 = $16,111 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 4446 + 13094 + 3570 + 5961 = $27,071 Mil.
Accounts Receivable was $6,096 Mil.
Revenue was 114960 + 129706 + 115688 + 116830 = $477,184 Mil.
Gross Profit was 28246 + 31735 + 29001 + 29410 = $118,392 Mil.
Total Current Assets was $59,687 Mil.
Total Assets was $202,517 Mil.
Property, Plant and Equipment(Net PPE) was $117,643 Mil.
Depreciation, Depletion and Amortization(DDA) was $8,933 Mil.
Selling, General & Admin. Expense(SGA) was $91,765 Mil.
Total Current Liabilities was $67,921 Mil.
Long-Term Debt was $48,233 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)
=(5813 / 485517) / (6096 / 477184)
=0.0119728 / 0.01277495
=0.9372

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)
=(32450 / 477184) / (28343 / 485517)
=0.24810555 / 0.24852271
=0.9983

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 - (62133 + 115685) / 200747) / (1 - (59687 + 117643) / 202517)
=0.11421839 / 0.12436981
=0.9184

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
=485517 / 477184
=1.0175

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))
=(8933 / (8933 + 117643)) / (9242 / (9242 + 115685))
=0.0705742 / 0.0739792
=0.954

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)
=(94028 / 485517) / (91765 / 477184)
=0.19366572 / 0.19230527
=1.0071

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)
=((42964 + 69624) / 200747) / ((48233 + 67921) / 202517)
=0.56084524 / 0.57355185
=0.9778

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
=(16111 - 0 - 27071) / 200747
=-0.0546

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 -2.81 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

Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14Jan15Apr15
DSRI 1.08671.07721.08971.0910.97120.96971.00790.96230.99560.9372
GMI 1.00691.00361.00080.99741.00111.00141.00351.00580.99990.9983
AQI 0.9660.94630.9440.92190.96110.9831.01110.97190.93130.9184
SGI 1.0491.03111.02561.02181.01581.01541.01691.01991.01961.0175
DEPI 0.99640.98990.9850.9720.96820.97030.9850.96370.95970.954
SGAI 0.99220.99621.00091.00421.01331.0161.01481.01551.00291.0071
LVGI 0.98581.00141.00221.00450.99780.98190.96010.96370.96150.9778
TATA -0.0423-0.0396-0.0406-0.0277-0.0353-0.0418-0.0395-0.0461-0.0599-0.0546
M-score -2.56-2.59-2.59-2.54-2.68-2.70-2.63-2.72-2.77-2.81
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)

GuruFocus Premium Plus Membership

FEEDBACK