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GuruFocus has detected 3 Warning Signs with Molson Coors Brewing Co $TAP.
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Molson Coors Brewing Co (NYSE:TAP)
Beneish M-Score
-1.78 (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.

Molson Coors Brewing Co has a M-score of -1.78 signals that the company is a manipulator.

TAP' s Beneish M-Score Range Over the Past 10 Years
Min: -3.67   Max: 1.31
Current: -1.78

-3.67
1.31

During the past 13 years, the highest Beneish M-Score of Molson Coors Brewing Co was 1.31. The lowest was -3.67. And the median was -2.62.


Definition

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 Molson Coors Brewing 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 * 0.8749+0.528 * 0.9783+0.404 * 1.1873+0.892 * 1.8942+0.115 * 1.5666
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.023+4.679 * 0.0315-0.327 * 1.7785
=-1.78

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

This Year (Mar17) TTM:Last Year (Mar16) TTM:
Accounts Receivable was $757 Mil.
Revenue was 2448.7 + 2294 + 947.6 + 986.2 = $6,677 Mil.
Gross Profit was 1075.8 + 808.4 + 406.3 + 424 = $2,715 Mil.
Total Current Assets was $2,279 Mil.
Total Assets was $29,543 Mil.
Property, Plant and Equipment(Net PPE) was $4,529 Mil.
Depreciation, Depletion and Amortization(DDA) was $518 Mil.
Selling, General & Admin. Expense(SGA) was $2,058 Mil.
Total Current Liabilities was $3,049 Mil.
Long-Term Debt was $11,443 Mil.
Net Income was 201.3 + 1438.4 + 202.5 + 172.3 = $2,015 Mil.
Non Operating Income was 0.4 + 15.2 + 0.8 + -30.4 = $-14 Mil.
Cash Flow from Operations was -118.3 + 496.7 + 365.8 + 352.7 = $1,097 Mil.
Accounts Receivable was $457 Mil.
Revenue was 657.2 + 844.4 + 1017.4 + 1005.7 = $3,525 Mil.
Gross Profit was 243.2 + 301.5 + 431.5 + 425.8 = $1,402 Mil.
Total Current Assets was $3,763 Mil.
Total Assets was $15,210 Mil.
Property, Plant and Equipment(Net PPE) was $1,589 Mil.
Depreciation, Depletion and Amortization(DDA) was $304 Mil.
Selling, General & Admin. Expense(SGA) was $1,062 Mil.
Total Current Liabilities was $1,222 Mil.
Long-Term Debt was $2,973 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables 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)
=(756.5 / 6676.5) / (456.5 / 3524.7)
=0.11330787 / 0.12951457
=0.8749

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)
=(1402 / 3524.7) / (2714.5 / 6676.5)
=0.39776435 / 0.4065753
=0.9783

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 plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (2279.2 + 4528.8) / 29542.9) / (1 - (3762.8 + 1588.7) / 15210.3)
=0.76955546 / 0.64816605
=1.1873

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.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=6676.5 / 3524.7
=1.8942

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))
=(304.4 / (304.4 + 1588.7)) / (518 / (518 + 4528.8))
=0.16079446 / 0.1026393
=1.5666

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)
=(2058.2 / 6676.5) / (1062.1 / 3524.7)
=0.30827529 / 0.30133061
=1.023

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)
=((11443.1 + 3048.7) / 29542.9) / ((2973.4 + 1221.9) / 15210.3)
=0.4905341 / 0.27581967
=1.7785

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
=(2014.5 - -14 - 1096.9) / 29542.9
=0.0315

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.

Molson Coors Brewing Co has a M-score of -1.78 signals that the company is likely to be a manipulator.


Related Terms

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


Historical Data

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

Molson Coors Brewing Co Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.05390.741.86861.03520.85931.03050.87680.86580.96971.1716
GMI 1.00640.99230.94060.97151.06231.04461.01150.99031.0131.0216
AQI 1.00281.15070.97110.95960.99821.07651.00750.9791.01231.0059
SGI 1.05910.77120.63521.07321.08031.1141.07390.98580.86041.3693
DEPI 1.34850.6551.29781.05170.96471.09640.85910.94370.89852.0801
SGAI 0.96020.99671.06381.04730.93160.9920.98710.9891.05031.1153
LVGI 0.87710.88740.94471.04160.99061.44550.92880.96341.01131.475
TATA -0.0087-0.0012-0.0156-0.0068-0.0146-0.0278-0.0398-0.0549-0.02910.0299
M-score -2.33-2.87-2.08-2.46-2.56-2.56-2.70-2.88-2.78-1.89

Molson Coors Brewing Co Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 0.86580.86520.88971.03080.96971.1371.03860.97311.17160.8749
GMI 0.99031.00091.00951.01741.0131.00140.99290.98411.02160.9783
AQI 0.9790.996511.01631.01230.83670.83160.57221.00591.1873
SGI 0.98580.96110.91520.880.86040.87460.9110.92931.36931.8942
DEPI 0.94370.89770.89530.87620.89850.98650.96851.08322.08011.5666
SGAI 0.9891.01981.02181.04011.05031.06471.09391.11071.11531.023
LVGI 0.96341.03451.03661.03171.01130.78270.81671.45661.4751.7785
TATA -0.0549-0.0381-0.04-0.0231-0.0291-0.0248-0.0228-0.01110.02990.0315
M-score -2.88-2.84-2.87-2.68-2.78-2.59-2.66-2.96-1.89-1.78
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