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Yum Brands Inc (NYSE:YUM)
Beneish M-Score
-3.02 (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 -3.02 suggests that the company is not a manipulator.

YUM' s 10-Year Beneish M-Score Range
Min: -4.86   Max: -0.58
Current: -3.02

-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 * 1.1043+0.528 * 1.0128+0.404 * 0.9296+0.892 * 0.9597+0.115 * 0.9721
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9923+4.679 * -0.1205-0.327 * 1.031
=-3.02

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $319 Mil.
Revenue was 4179 + 3466 + 2904 + 2535 = $13,084 Mil.
Gross Profit was 1098 + 976 + 740 + 769 = $3,583 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 $1,540 Mil.
Total Current Liabilities was $2,265 Mil.
Long-Term Debt was $2,918 Mil.
Net Income was 321 + 152 + 281 + 337 = $1,091 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 586 + 824 + 328 + 401 = $2,139 Mil.
Accounts Receivable was $301 Mil.
Revenue was 4153 + 3569 + 3168 + 2743 = $13,633 Mil.
Gross Profit was 1087 + 1026 + 829 + 839 = $3,781 Mil.
Total Current Assets was $1,925 Mil.
Total Assets was $9,013 Mil.
Property, Plant and Equipment(Net PPE) was $4,250 Mil.
Depreciation, Depletion and Amortization(DDA) was $665 Mil.
Selling, General & Admin. Expense(SGA) was $1,617 Mil.
Total Current Liabilities was $2,279 Mil.
Long-Term Debt was $2,932 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)
=(319 / 13084) / (301 / 13633)
=0.02438092 / 0.02207878
=1.1043

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)
=(976 / 13633) / (1098 / 13084)
=0.27734174 / 0.27384592
=1.0128

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 - (1691 + 4459) / 8695) / (1 - (1925 + 4250) / 9013)
=0.29269695 / 0.31487851
=0.9296

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
=13084 / 13633
=0.9597

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))
=(665 / (665 + 4250)) / (721 / (721 + 4459))
=0.1353001 / 0.13918919
=0.9721

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)
=(1540 / 13084) / (1617 / 13633)
=0.11770101 / 0.11860926
=0.9923

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)
=((2918 + 2265) / 8695) / ((2932 + 2279) / 9013)
=0.59608971 / 0.57816487
=1.031

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
=(1091 - 0 - 2139) / 8695
=-0.1205

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 -3.02 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.05651.18470.91150.93880.93781.08871.02331.00370.97471.1043
GMI 2.04290.96790.94471.03251.0310.90510.94251.02910.99551.0128
AQI 0.97121.0321.05380.91571.08290.99880.91511.07051.12570.9296
SGI 1.07531.03751.02271.08941.08530.95861.04681.11311.07980.9597
DEPI 0.94520.941.05210.94420.94711.00650.97150.99120.99390.9721
SGAI 0.32681.10440.98750.97120.9871.00850.98950.98261.00310.9957
LVGI 0.87161.03481.04861.16321.17630.83950.94850.95610.93771.031
TATA -0.0932-0.1025-0.087-0.1007-0.0853-0.0466-0.0974-0.0963-0.0773-0.1205
M-score -2.11-2.80-2.96-3.00-2.87-2.65-2.92-2.77-2.73-3.02

Yum Brands Inc Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 1.04151.00370.96760.96060.9550.97471.04051.1011.19941.1043
GMI 1.0011.02911.03121.03671.01380.99551.00360.99721.01161.0128
AQI 1.02691.07051.21361.03431.13691.12571.01251.07030.97870.9296
SGI 1.08351.11311.13321.13981.12541.07981.03720.98980.96080.9597
DEPI 0.94740.99120.98640.98391.03780.99390.99730.98420.96220.9721
SGAI 1.04590.98260.94530.93650.92940.98721.03731.06161.08920.9923
LVGI 0.94630.95610.93490.95320.92570.93770.97020.96820.99671.031
TATA -0.1096-0.0963-0.0666-0.0701-0.0745-0.0773-0.0834-0.0768-0.1056-0.1205
M-score -2.87-2.77-2.57-2.66-2.65-2.72-2.79-2.73-2.85-3.02
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