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Coca-Cola Co  (NYSE:KO) Beneish M-Score: -2.64 (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.

Coca-Cola Co has a M-score of -2.64 suggests that the company is not a manipulator.

NYSE:KO' s Beneish M-Score Range Over the Past 10 Years
Min: -2.96   Max: -2.25
Current: -2.64

-2.96
-2.25

During the past 13 years, the highest Beneish M-Score of Coca-Cola Co was -2.25. The lowest was -2.96. And the median was -2.64.


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

Coca-Cola Co Annual Data

Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16
Beneish M-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -2.68 -2.54 -2.74 -2.90 -2.59

Coca-Cola Co Quarterly Data

Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17
Beneish M-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -2.85 -2.59 -2.70 -2.76 -2.64

Competitive Comparison
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap.


Calculation

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Altman Z-Score) or business trend (Piotroski 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 Coca-Cola Co 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 * 1.0214+0.528 * 0.9853+0.404 * 1.0147+0.892 * 0.8788+0.115 * 0.991
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.5515+4.679 * -0.027-0.327 * 1.049
=-2.64

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep17) TTM:Last Year (Sep16) TTM:
Accounts Receivable was USD 3,664 Mil.
Revenue was 9078 + 9702 + 9118 + 9409 = USD 37,307 Mil.
Gross Profit was 5683 + 6043 + 5605 + 5615 = USD 22,946 Mil.
Total Current Assets was USD 38,404 Mil.
Total Assets was USD 90,515 Mil.
Property, Plant and Equipment(Net PPE) was USD 8,306 Mil.
Depreciation, Depletion and Amortization(DDA) was USD 1,390 Mil.
Selling, General, & Admin. Expense(SGA) was USD 6,136 Mil.
Total Current Liabilities was USD 27,633 Mil.
Long-Term Debt & Capital Lease Obligation was USD 32,471 Mil.
Net Income was 1447 + 1371 + 1182 + 550 = USD 4,550 Mil.
Non-Recurring Items was -413 + 612 + -438 + -762 = USD -1,001 Mil.
Cash Flow from Operations was 2527 + 2603 + 788 + 2073 = USD 7,991 Mil.
Accounts Receivable was USD 4,082 Mil.
Revenue was 10633 + 11539 + 10282 + 10000 = USD 42,454 Mil.
Gross Profit was 6502 + 7068 + 6213 + 5946 = USD 25,729 Mil.
Total Current Assets was USD 37,956 Mil.
Total Assets was USD 93,927 Mil.
Property, Plant and Equipment(Net PPE) was USD 11,172 Mil.
(DDA) was USD 1,850 Mil.
Selling, General, & Admin. Expense(SGA) was USD 12,661 Mil.
Total Current Liabilities was USD 27,792 Mil.
Long-Term Debt & Capital Lease Obligation was USD 31,663 Mil.




1. DSRI = Days Sales in Receivables Index

Measured as the ratio of Revenue in Accounts Receivable 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)
=(3664 / 37307) / (4082 / 42454)
=0.09821213 / 0.09615113
=1.0214

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)
=(25729 / 42454) / (22946 / 37307)
=0.60604419 / 0.61505884
=0.9853

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 Property, Plant and Equipment to Total Assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (38404 + 8306) / 90515) / (1 - (37956 + 11172) / 93927)
=0.48395294 / 0.47695551
=1.0147

4. SGI = Sales Growth Index

Ratio of Revenue 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
=37307 / 42454
=0.8788

5. DEPI = Depreciation Index

Measured as the ratio of the rate of Depreciation, Depletion and Amortization 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))
=(1850 / (1850 + 11172)) / (1390 / (1390 + 8306))
=0.14206727 / 0.14335809
=0.991

6. SGAI = Sales, General and Administrative expenses Index

The ratio of c 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)
=(6136 / 37307) / (12661 / 42454)
=0.16447316 / 0.29822867
=0.5515

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)
=((32471 + 27633) / 90515) / ((31663 + 27792) / 93927)
=0.66402254 / 0.63299158
=1.049

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
=(4550 - -1001 - 7991) / 90515
=-0.027

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.

Coca-Cola Co has a M-score of -2.64 suggests that the company will not be a manipulator.

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