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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 -2.16.
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 * 0.7921||+||0.528 * 1.0097||+||0.404 * 2.3819||+||0.892 * 1.9445||+||0.115 * 1.0856|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9993||+||4.679 * -0.0589||-||0.327 * 1.294|
|This Year (Sep15) TTM:||Last Year (Sep14) TTM:|
|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 $411.0 Mil.
Total Current Liabilities was $107.0 Mil.
Long-Term Debt was $230.0 Mil.
Net Income was -26.049 + -38.721 + -58.384 + -10.897 = $-134.1 Mil.
Non Operating Income was 0.366 + 0.45 + 0.269 + 0.317 = $1.4 Mil.
Cash Flow from Operations was 22.442 + 14.691 + 1.455 + 12.162 = $50.8 Mil.
|Accounts Receivable was $21.8 Mil.
Revenue was 88.646 + 78.675 + 66.243 + 58.348 = $291.9 Mil.
Gross Profit was 80.967 + 71.882 + 60.079 + 53.078 = $266.0 Mil.
Total Current Assets was $397.0 Mil.
Total Assets was $649.2 Mil.
Property, Plant and Equipment(Net PPE) was $38.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $33.2 Mil.
Selling, General & Admin. Expense(SGA) was $211.5 Mil.
Total Current Liabilities was $53.5 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)|
|=||(33.568 / 567.636)||/||(21.794 / 291.912)|
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)|
|=||(154.232 / 291.912)||/||(160.312 / 567.636)|
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 - (595.532 + 85.745) / 3162.449)||/||(1 - (397.035 + 38.335) / 649.21)|
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))|
|=||(33.152 / (33.152 + 38.335))||/||(63.946 / (63.946 + 85.745))|
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)|
|=||(411.013 / 567.636)||/||(211.523 / 291.912)|
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 + 106.983) / 3162.449)||/||((0 + 53.461) / 649.21)|
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|
|=||(-134.051 - 1.402||-||50.75)||/||3162.449|
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