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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.
During the past 13 years, the highest Beneish M-Score of Exxon Mobil Corporation was -1.61. The lowest was -3.19. And the median was -2.75.
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 Exxon Mobil Corporation 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 * 0.9018||+||0.528 * 0.975||+||0.404 * 0.9733||+||0.892 * 0.8546||+||0.115 * 1.006|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.1055||+||4.679 * -0.0281||-||0.327 * 0.944|
|This Year (Mar15) TTM:||Last Year (Mar14) TTM:|
|Accounts Receivable was $25,031 Mil.|
Revenue was 67618 + 86029 + 107490 + 111647 = $372,784 Mil.
Gross Profit was 20660 + 31106 + 37111 + 38520 = $127,397 Mil.
Total Current Assets was $50,658 Mil.
Total Assets was $342,961 Mil.
Property, Plant and Equipment(Net PPE) was $249,497 Mil.
Depreciation, Depletion and Amortization(DDA) was $17,405 Mil.
Selling, General & Admin. Expense(SGA) was $12,179 Mil.
Total Current Liabilities was $55,933 Mil.
Long-Term Debt was $19,494 Mil.
Net Income was 4940 + 6570 + 8070 + 8780 = $28,360 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 7998 + 7415 + 12396 + 10202 = $38,011 Mil.
|Accounts Receivable was $32,480 Mil.
Revenue was 106325 + 110860 + 112372 + 106666 = $436,223 Mil.
Gross Profit was 30955 + 39123 + 38569 + 36710 = $145,357 Mil.
Total Current Assets was $61,864 Mil.
Total Assets was $353,033 Mil.
Property, Plant and Equipment(Net PPE) was $245,897 Mil.
Depreciation, Depletion and Amortization(DDA) was $17,264 Mil.
Selling, General & Admin. Expense(SGA) was $12,891 Mil.
Total Current Liabilities was $70,108 Mil.
Long-Term Debt was $12,144 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(25031 / 372784)||/||(32480 / 436223)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(31106 / 436223)||/||(20660 / 372784)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (50658 + 249497) / 342961)||/||(1 - (61864 + 245897) / 353033)|
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.
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))|
|=||(17264 / (17264 + 245897))||/||(17405 / (17405 + 249497))|
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)|
|=||(12179 / 372784)||/||(12891 / 436223)|
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)|
|=||((19494 + 55933) / 342961)||/||((12144 + 70108) / 353033)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(28360 - 0||-||38011)||/||342961|
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.
Exxon Mobil Corporation has a M-score of -2.85 suggests that the company will not be a manipulator.
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
Exxon Mobil Corporation Annual Data
Exxon Mobil Corporation Quarterly Data