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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 -1.61. The lowest was -2.83. And the median was -2.14.
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 * 0.653||+||0.528 * 0.9901||+||0.404 * 1.07||+||0.892 * 1.5443||+||0.115 * 0.8295|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.2576||+||4.679 * -0.0671||-||0.327 * 1.0572|
|This Year (Jun16) TTM:||Last Year (Jun15) TTM:|
|Accounts Receivable was $35.5 Mil.|
Revenue was 208.403 + 185.982 + 169.37 + 176.765 = $740.5 Mil.
Gross Profit was 191.183 + 169.53 + 154.265 + 160.312 = $675.3 Mil.
Total Current Assets was $471.4 Mil.
Total Assets was $3,037.1 Mil.
Property, Plant and Equipment(Net PPE) was $98.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $90.3 Mil.
Selling, General & Admin. Expense(SGA) was $680.0 Mil.
Total Current Liabilities was $116.8 Mil.
Long-Term Debt was $230.0 Mil.
Net Income was -156.149 + -47.605 + -25.72 + -26.049 = $-255.5 Mil.
Non Operating Income was 0.753 + 0.681 + 0.416 + 0.366 = $2.2 Mil.
Cash Flow from Operations was -79.447 + 18.918 + -15.929 + 22.442 = $-54.0 Mil.
|Accounts Receivable was $35.2 Mil.
Revenue was 171.269 + 127.273 + 92.329 + 88.646 = $479.5 Mil.
Gross Profit was 154.232 + 114.254 + 83.504 + 80.967 = $433.0 Mil.
Total Current Assets was $682.1 Mil.
Total Assets was $3,169.9 Mil.
Property, Plant and Equipment(Net PPE) was $81.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $53.4 Mil.
Selling, General & Admin. Expense(SGA) was $350.1 Mil.
Total Current Liabilities was $112.4 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)|
|=||(35.494 / 740.52)||/||(35.198 / 479.517)|
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)|
|=||(432.957 / 479.517)||/||(675.29 / 740.52)|
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 - (471.365 + 98.799) / 3037.101)||/||(1 - (682.053 + 81.416) / 3169.862)|
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))|
|=||(53.401 / (53.401 + 81.416))||/||(90.296 / (90.296 + 98.799))|
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)|
|=||(679.957 / 740.52)||/||(350.106 / 479.517)|
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 + 116.788) / 3037.101)||/||((230 + 112.375) / 3169.862)|
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|
|=||(-255.523 - 2.216||-||-54.016)||/||3037.101|
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 -2.69 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