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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 7 years, the highest Beneish M-Score of Zillow Group Inc was -1.34. The lowest was -3.18. And the median was -2.19.
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 Zillow Group 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 * 0.8567||+||0.528 * 0.9864||+||0.404 * 1.0268||+||0.892 * 1.3888||+||0.115 * 0.8448|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.1962||+||4.679 * -0.0583||-||0.327 * 0.9931|
|This Year (Sep16) TTM:||Last Year (Sep15) TTM:|
|Accounts Receivable was $39.9 Mil.|
Revenue was 224.592 + 208.403 + 185.982 + 169.37 = $788.3 Mil.
Gross Profit was 206.338 + 191.183 + 169.53 + 154.265 = $721.3 Mil.
Total Current Assets was $501.8 Mil.
Total Assets was $3,064.5 Mil.
Property, Plant and Equipment(Net PPE) was $94.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $96.2 Mil.
Selling, General & Admin. Expense(SGA) was $685.7 Mil.
Total Current Liabilities was $94.3 Mil.
Long-Term Debt was $230.0 Mil.
Net Income was 6.807 + -156.149 + -47.605 + -25.72 = $-222.7 Mil.
Non Operating Income was 0.561 + 0.753 + 0.681 + 0.416 = $2.4 Mil.
Cash Flow from Operations was 30.093 + -79.447 + 18.918 + -15.929 = $-46.4 Mil.
|Accounts Receivable was $33.6 Mil.
Revenue was 176.765 + 171.269 + 127.273 + 92.329 = $567.6 Mil.
Gross Profit was 160.312 + 154.232 + 114.254 + 83.504 = $512.3 Mil.
Total Current Assets was $595.5 Mil.
Total Assets was $3,162.4 Mil.
Property, Plant and Equipment(Net PPE) was $85.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $63.9 Mil.
Selling, General & Admin. Expense(SGA) was $412.8 Mil.
Total Current Liabilities was $107.0 Mil.
Long-Term Debt was $230.0 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)|
|=||(39.939 / 788.347)||/||(33.568 / 567.636)|
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)|
|=||(512.302 / 567.636)||/||(721.316 / 788.347)|
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 - (501.782 + 94.045) / 3064.504)||/||(1 - (595.532 + 85.745) / 3162.449)|
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))|
|=||(63.946 / (63.946 + 85.745))||/||(96.207 / (96.207 + 94.045))|
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)|
|=||(685.725 / 788.347)||/||(412.75 / 567.636)|
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)|
|=||((230 + 94.294) / 3064.504)||/||((230 + 106.983) / 3162.449)|
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|
|=||(-222.667 - 2.411||-||-46.365)||/||3064.504|
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.
Zillow Group Inc has a M-score of -2.58 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
Zillow Group Inc Annual Data
Zillow Group Inc Quarterly Data