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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 6 years, the highest Beneish M-Score of Zillow Group Inc was -1.63. The lowest was -3.03. And the median was -2.29.
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 * 0.9471||+||0.528 * 1.0068||+||0.404 * 2.1833||+||0.892 * 1.8689||+||0.115 * 1.183|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9878||+||4.679 * -0.0499||-||0.327 * 1.4577|
|This Year (Jun15) TTM:||Last Year (Jun14) TTM:|
|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.
Net Income was -38.721 + -58.384 + -10.897 + -15.977 = $-124.0 Mil.
Non Operating Income was 0.45 + 0.269 + 0.317 + 0.265 = $1.3 Mil.
Cash Flow from Operations was 14.691 + 1.455 + 12.162 + 4.482 = $32.8 Mil.
|Accounts Receivable was $19.9 Mil.
Revenue was 78.675 + 66.243 + 58.348 + 53.311 = $256.6 Mil.
Gross Profit was 71.882 + 60.079 + 53.078 + 48.195 = $233.2 Mil.
Total Current Assets was $384.4 Mil.
Total Assets was $641.5 Mil.
Property, Plant and Equipment(Net PPE) was $34.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $30.0 Mil.
Selling, General & Admin. Expense(SGA) was $189.7 Mil.
Total Current Liabilities was $47.5 Mil.
Long-Term Debt was $0.0 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)|
|=||(35.198 / 479.517)||/||(19.885 / 256.577)|
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)|
|=||(114.254 / 256.577)||/||(154.232 / 479.517)|
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 - (682.053 + 81.416) / 3169.862)||/||(1 - (384.415 + 34.011) / 641.473)|
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))|
|=||(29.99 / (29.99 + 34.011))||/||(53.401 / (53.401 + 81.416))|
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)|
|=||(350.106 / 479.517)||/||(189.654 / 256.577)|
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 + 112.375) / 3169.862)||/||((0 + 47.53) / 641.473)|
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|
|=||(-123.979 - 1.301||-||32.79)||/||3169.862|
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 -1.63 signals that the company is likely to 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