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Yum Brands Inc (NYSE:YUM)
Beneish M-Score
-2.98 (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.

Yum Brands Inc has a M-score of -2.98 suggests that the company is not a manipulator.

YUM' s 10-Year Beneish M-Score Range
Min: -4.86   Max: -0.58
Current: -2.98

-4.86
-0.58

During the past 13 years, the highest Beneish M-Score of Yum Brands Inc was -0.58. The lowest was -4.86. And the median was -2.75.


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 Yum Brands 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 * 1.0038+0.528 * 1.0122+0.404 * 0.9011+0.892 * 1.0149+0.115 * 0.9864
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9882+4.679 * -0.0954-0.327 * 1.1033
=-2.98

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $325 Mil.
Revenue was 3997 + 3354 + 3204 + 2724 = $13,279 Mil.
Gross Profit was 798 + 892 + 840 + 840 = $3,370 Mil.
Total Current Assets was $1,646 Mil.
Total Assets was $8,345 Mil.
Property, Plant and Equipment(Net PPE) was $4,498 Mil.
Depreciation, Depletion and Amortization(DDA) was $739 Mil.
Selling, General & Admin. Expense(SGA) was $1,352 Mil.
Total Current Liabilities was $2,411 Mil.
Long-Term Debt was $3,077 Mil.
Net Income was -86 + 404 + 334 + 399 = $1,051 Mil.
Non Operating Income was -80 + -56 + 0 + -66 = $-202 Mil.
Cash Flow from Operations was 437 + 528 + 514 + 570 = $2,049 Mil.
Accounts Receivable was $319 Mil.
Revenue was 4179 + 3466 + 2904 + 2535 = $13,084 Mil.
Gross Profit was 940 + 976 + 706 + 739 = $3,361 Mil.
Total Current Assets was $1,691 Mil.
Total Assets was $8,695 Mil.
Property, Plant and Equipment(Net PPE) was $4,459 Mil.
Depreciation, Depletion and Amortization(DDA) was $721 Mil.
Selling, General & Admin. Expense(SGA) was $1,348 Mil.
Total Current Liabilities was $2,265 Mil.
Long-Term Debt was $2,918 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)
=(325 / 13279) / (319 / 13084)
=0.02447473 / 0.02438092
=1.0038

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)
=(892 / 13084) / (798 / 13279)
=0.25687863 / 0.25378417
=1.0122

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 - (1646 + 4498) / 8345) / (1 - (1691 + 4459) / 8695)
=0.26375075 / 0.29269695
=0.9011

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
=13279 / 13084
=1.0149

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))
=(721 / (721 + 4459)) / (739 / (739 + 4498))
=0.13918919 / 0.14111132
=0.9864

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)
=(1352 / 13279) / (1348 / 13084)
=0.1018149 / 0.1030266
=0.9882

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)
=((3077 + 2411) / 8345) / ((2918 + 2265) / 8695)
=0.6576393 / 0.59608971
=1.1033

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
=(1051 - -202 - 2049) / 8345
=-0.0954

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.

Yum Brands Inc has a M-score of -2.98 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.

Yum Brands Inc Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.18470.91150.93880.93781.08871.02331.00370.97471.10431.0038
GMI 0.96790.94471.03251.0310.90510.94251.02911.03181.02221.0114
AQI 1.0321.05380.91571.08290.99880.91511.07051.12570.92960.9011
SGI 1.03751.02271.08941.08530.95861.04681.11311.07980.95971.0149
DEPI 0.941.05210.94420.94711.00650.97150.99120.99390.97210.9864
SGAI 1.10440.98750.97120.9871.00850.98950.98260.92190.97430.9902
LVGI 1.03481.04861.16321.17630.83950.94850.95610.93771.0311.1033
TATA -0.1025-0.087-0.1007-0.0853-0.0466-0.0974-0.0963-0.0773-0.0637-0.0884
M-score -2.80-2.96-3.00-2.87-2.65-2.92-2.77-2.69-2.74-2.94

Yum Brands Inc Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 0.9550.97471.04051.1011.19941.10430.9730.96961.03971.0038
GMI 1.02251.01731.03461.03881.03581.05651.02810.99721.01531.0122
AQI 1.13691.12571.01251.07030.97870.92960.92770.85650.94550.9011
SGI 1.12541.07981.03720.98980.96080.95970.98871.03131.03091.0149
DEPI 1.03780.99390.99730.98420.96220.97210.94780.96120.9810.9864
SGAI 0.91020.93770.98530.98591.05520.91440.88580.88360.85770.9882
LVGI 0.92570.93770.97020.96820.99671.0311.04521.06371.05231.1033
TATA -0.0745-0.0773-0.0765-0.0697-0.0914-0.0711-0.0828-0.0969-0.034-0.0954
M-score -2.65-2.70-2.73-2.66-2.76-2.75-2.92-3.00-2.58-2.98
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