Rogers Communications Beneish M-Score 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 Rogers Communications 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 * | + | 0.528 * | + | 0.404 * | + | 0.892 * | + | 0.115 * |
| - | 0.172 * SGAI | + | 4.679 * TATA | - | 0.327 * LVGI |
| - | 0.172 * | + | 4.679 * | - | 0.327 * |
| = | |
* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.
| This Year (Dec20) TTM: | Last Year (Dec19) TTM: |
Accounts Receivable was $2,230 Mil.
Revenue was 2872.9799359825 + 2770.2191987906 + 2328.0696576151 + 2446.9914040115 = $10,418 Mil.
Gross Profit was 1241.3147006011 + 1238.0952380952 + 954.84061393152 + 956.30372492837 = $4,391 Mil.
Total Current Assets was $5,409 Mil.
Total Assets was $30,333 Mil.
Property, Plant and Equipment(Net PPE) was $10,944 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,004 Mil.
Selling, General, & Admin. Expense(SGA) was $0 Mil.
Total Current Liabilities was $5,142 Mil.
Long-Term Debt & Capital Lease Obligation was $14,293 Mil.
Net Income was 350.53478023265 + 386.9992441421 + 205.87367178276 + 252.14899713467 = $1,196 Mil.
Non Operating Income was -64.798188773519 + -43.083900226757 + -31.729634002361 + -9.3123209169054 = $-149 Mil.
Cash Flow from Operations was 739.32391287376 + 745.27588813303 + 1054.4569067296 + 686.96275071633 = $3,226 Mil.
|
Accounts Receivable was $1,199 Mil.
Revenue was 3000.9871668312 + 2835.1332980893 + 2844.457822259 + 2682.6714531449 = $11,363 Mil.
Gross Profit was 1161.8194244058 + 1292.953704403 + 1230.3408834374 + 998.42943684092 = $4,684 Mil.
Total Current Assets was $3,886 Mil.
Total Assets was $28,111 Mil.
Property, Plant and Equipment(Net PPE) was $10,581 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,906 Mil.
Selling, General, & Admin. Expense(SGA) was $0 Mil.
Total Current Liabilities was $4,529 Mil.
Long-Term Debt & Capital Lease Obligation was $13,260 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) |
| = | (2229.6822546647 / 10418.2601964) | / | (1199.0280203508 / 11363.249740324) |
| = | 0.21401676 | / | 0.10551806 |
| | = | |
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) |
| = | (4683.5434490871 / 11363.249740324) | / | (4390.5542775563 / 10418.2601964) |
| = | 0.41216585 | / | 0.42142874 |
| | = | |
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 - (5409.4777109845 + 10943.867593099) / 30333.359356702) | / | (1 - (3885.6405194016 + 10580.909712203) / 28110.714556914) |
| = | 0.46087919 | / | 0.48537238 |
| | = | |
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 |
| = | 10418.2601964 | / | 11363.249740324 |
| | = | |
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)) |
| = | (1906.264785436 / (1906.264785436 + 10580.909712203)) | / | (2003.972903585 / (2003.972903585 + 10943.867593099)) |
| = | 0.15265782 | / | 0.15477275 |
| | = | |
Note: If the Depreciation, Depletion and Amortization data is not available, we assume that the depreciation rate is constant and set the Depreciation Index to 1.
6. SGAI = Sales, General and Administrative expenses Index
The ratio of Selling, General, & Admin. Expense(SGA) to Sales 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) |
| = | (0 / 10418.2601964) | / | (0 / 11363.249740324) |
| = | 0 | / | 0 |
| | = | |
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 in leverage
| LVGI | = | ((LTD_t + CurrentLiabilities_t) / TotalAssets_t) | / | ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1) |
| = | ((14293.075181513 + 5141.6972441252) / 30333.359356702) | / | ((13259.928620245 + 4528.8176778799) / 28110.714556914) |
| = | 0.64070623 | / | 0.63281018 |
| | = | |
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 |
| = | (1195.5566932922 - -148.92404391954 | - | 3226.0194584528) | / | 30333.359356702 |
| | = | -0.062 |
An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator. An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.
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