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DEO (Diageo) Beneish M-Score : -2.27 (As of Oct. 31, 2024)


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What is Diageo Beneish M-Score?

The zones of discrimination for M-Score is as such:

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.

Good Sign:

Beneish M-Score -2.27 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

The historical rank and industry rank for Diageo's Beneish M-Score or its related term are showing as below:

DEO' s Beneish M-Score Range Over the Past 10 Years
Min: -3.02   Med: -2.47   Max: -2.26
Current: -2.27

During the past 13 years, the highest Beneish M-Score of Diageo was -2.26. The lowest was -3.02. And the median was -2.47.


Diageo Beneish M-Score Historical Data

The historical data trend for Diageo's Beneish M-Score can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Diageo Beneish M-Score Chart

Diageo Annual Data
Trend Jun15 Jun16 Jun17 Jun18 Jun19 Jun20 Jun21 Jun22 Jun23 Jun24
Beneish M-Score
Get a 7-Day Free Trial Premium Member Only Premium Member Only -3.02 -2.26 -2.26 -2.62 -2.27

Diageo Semi-Annual Data
Dec14 Jun15 Dec15 Jun16 Dec16 Jun17 Dec17 Jun18 Dec18 Jun19 Dec19 Jun20 Dec20 Jun21 Dec21 Jun22 Dec22 Jun23 Dec23 Jun24
Beneish M-Score Get a 7-Day Free Trial 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 -2.26 - -2.62 - -2.27

Competitive Comparison of Diageo's Beneish M-Score

For the Beverages - Wineries & Distilleries subindustry, Diageo's Beneish M-Score, along with its competitors' market caps and Beneish M-Score data, can be viewed below:

* 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. Note that "N/A" values will not show up in the chart.


Diageo's Beneish M-Score Distribution in the Beverages - Alcoholic Industry

For the Beverages - Alcoholic industry and Consumer Defensive sector, Diageo's Beneish M-Score distribution charts can be found below:

* The bar in red indicates where Diageo's Beneish M-Score falls into.



Diageo 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 Diageo 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 * 1.0826+0.528 * 0.9916+0.404 * 1.0015+0.892 * 0.9861+0.115 * 2.6212
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0219+4.679 * -0.005168-0.327 * 0.9967
=-2.26

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

This Year (Jun24) TTM:Last Year (Jun23) TTM:
Total Receivables was $2,986 Mil.
Revenue was $20,269 Mil.
Gross Profit was $12,198 Mil.
Total Current Assets was $15,126 Mil.
Total Assets was $45,474 Mil.
Property, Plant and Equipment(Net PPE) was $8,509 Mil.
Depreciation, Depletion and Amortization(DDA) was $493 Mil.
Selling, General, & Admin. Expense(SGA) was $3,691 Mil.
Total Current Liabilities was $9,868 Mil.
Long-Term Debt & Capital Lease Obligation was $19,125 Mil.
Net Income was $3,870 Mil.
Gross Profit was $0 Mil.
Cash Flow from Operations was $4,105 Mil.
Total Receivables was $2,797 Mil.
Revenue was $20,555 Mil.
Gross Profit was $12,266 Mil.
Total Current Assets was $15,622 Mil.
Total Assets was $44,883 Mil.
Property, Plant and Equipment(Net PPE) was $7,738 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,297 Mil.
Selling, General, & Admin. Expense(SGA) was $3,663 Mil.
Total Current Liabilities was $9,593 Mil.
Long-Term Debt & Capital Lease Obligation was $19,119 Mil.




1. DSRI = Days Sales in Receivables Index

Measured as the ratio of Revenue in Total 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)
=(2986 / 20269) / (2797 / 20555)
=0.147319 / 0.136074
=1.0826

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)
=(12266 / 20555) / (12198 / 20269)
=0.59674 / 0.601806
=0.9916

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 - (15126 + 8509) / 45474) / (1 - (15622 + 7738) / 44883)
=0.480252 / 0.479536
=1.0015

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
=20269 / 20555
=0.9861

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))
=(1297 / (1297 + 7738)) / (493 / (493 + 8509))
=0.143553 / 0.054766
=2.6212

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)
=(3691 / 20269) / (3663 / 20555)
=0.182101 / 0.178205
=1.0219

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)
=((19125 + 9868) / 45474) / ((19119 + 9593) / 44883)
=0.637573 / 0.639708
=0.9967

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
=(3870 - 0 - 4105) / 45474
=-0.005168

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.

Diageo has a M-score of -2.26 suggests that the company is unlikely to be a manipulator.


Diageo Business Description

Address
16 Great Marlborough Street, London, GBR, W1F 7HS
The product of a merger between Grand Metropolitan and Guinness in 1997, Diageo is one of the world's leading producers of branded premium spirits, approximately level with Kweichow Moutai in revenue terms. It also produces and markets beer and wine. Brands include Johnnie Walker blended scotch, Smirnoff vodka, Crown Royal Canadian whiskey, Captain Morgan rum, Casamigos tequila, Tanqueray gin, Baileys Irish Cream, and Guinness stout. Diageo also owns 34% of premium champagne and cognac maker Moet Hennessy, a subsidiary of French luxury goods maker LVMH Moet Hennessy-Louis Vuitton, and a near-56% stake in India's United Spirits.

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