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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 Corp was -1.26. The lowest was -3.19. And the median was -2.59.
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 Corp 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 * 1.0591||+||0.528 * 0.9474||+||0.404 * 1.0375||+||0.892 * 0.6757||+||0.115 * 0.969|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.3447||+||4.679 * -0.0399||-||0.327 * 0.9967|
|This Year (Sep15) TTM:||Last Year (Sep14) TTM:|
|Accounts Receivable was $22,157 Mil.|
Revenue was 67344 + 74113 + 67618 + 86029 = $295,104 Mil.
Gross Profit was 20641 + 21601 + 20660 + 24570 = $87,472 Mil.
Total Current Assets was $47,234 Mil.
Total Assets was $340,662 Mil.
Property, Plant and Equipment(Net PPE) was $250,583 Mil.
Depreciation, Depletion and Amortization(DDA) was $17,751 Mil.
Selling, General & Admin. Expense(SGA) was $11,639 Mil.
Total Current Liabilities was $54,828 Mil.
Long-Term Debt was $19,839 Mil.
Net Income was 4240 + 4190 + 4940 + 6570 = $19,940 Mil.
Non Operating Income was 78 + 0 + 88 + 0 = $166 Mil.
Cash Flow from Operations was 9174 + 8792 + 7998 + 7415 = $33,379 Mil.
|Accounts Receivable was $30,963 Mil.
Revenue was 107490 + 111647 + 106773 + 110860 = $436,770 Mil.
Gross Profit was 29592 + 30649 + 30955 + 31460 = $122,656 Mil.
Total Current Assets was $58,595 Mil.
Total Assets was $352,764 Mil.
Property, Plant and Equipment(Net PPE) was $251,406 Mil.
Depreciation, Depletion and Amortization(DDA) was $17,219 Mil.
Selling, General & Admin. Expense(SGA) was $12,811 Mil.
Total Current Liabilities was $65,984 Mil.
Long-Term Debt was $11,591 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)|
|=||(22157 / 295104)||/||(30963 / 436770)|
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)|
|=||(21601 / 436770)||/||(20641 / 295104)|
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 - (47234 + 250583) / 340662)||/||(1 - (58595 + 251406) / 352764)|
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))|
|=||(17219 / (17219 + 251406))||/||(17751 / (17751 + 250583))|
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)|
|=||(11639 / 295104)||/||(12811 / 436770)|
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)|
|=||((19839 + 54828) / 340662)||/||((11591 + 65984) / 352764)|
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|
|=||(19940 - 166||-||33379)||/||340662|
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 Corp has a M-score of -2.98 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 Corp Annual Data
Exxon Mobil Corp Quarterly Data