This module uses fundamental data of Diageo PLC to approximate the value of its Beneish M Score. Diageo PLC M Score tells investors if the company management is likely to be manipulating earnings. The score is calculated using eight financial indicators that are adjusted by a specific multiplier. Please note, the M Score is a probabilistic model and cannot detect companies that manipulate their earnings with 100% accuracy. Check out Investing Opportunities to better understand how to build diversified portfolios, which includes a position in Diageo PLC. Also, note that the market value of any company could be closely tied with the direction of predictive economic indicators such as signals in bureau of economic analysis.
Diageo
Beneish M Score
Sale Purchase Of Stock
Change To Inventory
Change In Cash
Free Cash Flow
Change In Working Capital
Other Cashflows From Financing Activities
Depreciation
Other Non Cash Items
Total Cash From Operating Activities
Net Income
Total Cash From Financing Activities
Change To Account Receivables
Dividends Paid
Total Cashflows From Investing Activities
Net Borrowings
Change To Netincome
Change To Liabilities
Investments
Change To Operating Activities
Other Cashflows From Investing Activities
Stock Based Compensation
Issuance Of Capital Stock
Total Assets
Short Long Term Debt Total
Other Current Liab
Total Current Liabilities
Total Stockholder Equity
Property Plant And Equipment Net
Current Deferred Revenue
Net Debt
Retained Earnings
Accounts Payable
Cash
Non Current Assets Total
Non Currrent Assets Other
Cash And Short Term Investments
Common Stock Total Equity
Common Stock Shares Outstanding
Short Term Investments
Liabilities And Stockholders Equity
Non Current Liabilities Total
Inventory
Other Current Assets
Other Stockholder Equity
Total Liab
Property Plant And Equipment Gross
Total Current Assets
Accumulated Other Comprehensive Income
Short Term Debt
Intangible Assets
Common Stock
Other Liab
Other Assets
Long Term Debt
Net Receivables
Good Will
Property Plant Equipment
Treasury Stock
Net Tangible Assets
Long Term Investments
Short Long Term Debt
Deferred Long Term Liab
Long Term Debt Total
Capital Surpluse
Capital Lease Obligations
Net Invested Capital
Net Working Capital
Capital Stock
Cash And Equivalents
Depreciation And Amortization
Interest Expense
Total Revenue
Gross Profit
Other Operating Expenses
Operating Income
Ebit
Research Development
Ebitda
Total Operating Expenses
Income Before Tax
Total Other Income Expense Net
Income Tax Expense
Net Income Applicable To Common Shares
Minority Interest
Selling General Administrative
Selling And Marketing Expenses
Cost Of Revenue
Net Income From Continuing Ops
Tax Provision
Net Interest Income
Interest Income
Reconciled Depreciation
Probability Of Bankruptcy
At present, Diageo PLC's Long Term Debt is projected to increase significantly based on the last few years of reporting. The current year's Short and Long Term Debt is expected to grow to about 2.1 B, whereas Net Debt is forecasted to decline to about 4.8 B.
At this time, Diageo PLC's M Score is inapplicable. The earnings manipulation may begin if Diageo PLC's top management creates an artificial sense of financial success, forcing the stock price to be traded at a high price-earnings multiple than it should be. In general, excessive earnings management by Diageo PLC executives may lead to removing some of the operating profits from subsequent periods to inflate earnings in the following periods. This way, the manipulation of Diageo PLC's earnings can lead to misrepresentations of actual financial condition, taking the otherwise loyal stakeholders on to the path of questionable ethical practices and plain fraud.
The cure to earnings manipulation is the transparency of financial reporting. It will typically remove the temptation of the top executives to inflate earnings (i.e., to promote the idea of 'winning at any cost'). Because a healthy internal audit department can enhance transparency, the board should promote the auditors' access to all the record-keeping systems across the enterprise. For example, if Diageo PLC's auditors report directly to the board (not management), the managers will be reluctant to manipulate simply due to the fear of punishment. On the other hand, the auditors will be free to investigate the ledgers properly because they know that the board has their back.
One of the toughest challenges investors face today is learning how to quickly synthesize historical financial statements and information provided by the company, SEC reporting, and various external parties in order to detect the potential manipulation of earnings. Understanding the correlation between Diageo PLC's different financial indicators related to revenue, expenses, operating profit, and net earnings helps investors identify and prioritize their investing strategies towards Diageo PLC in a much-optimized way. Analyzing correlations between earnings drivers directly associated with dollar figures is the most effective way to find Diageo PLC's degree of accounting gimmicks and manipulations.
M-Score is one of many grading techniques for value stocks. It was developed by Professor M. Daniel Beneish of the Kelley School of Business at Indiana University and published in 1999 under the paper titled The Detection of Earnings Manipulation. The Beneish score is a multi-factor model that utilizes financial identifiers to compile eight variables used to classify whether a company has manipulated its reported earnings. The variables are built from the officially filed financial statements to create a final score call 'M Score.' The score helps to identify companies that are likely to manipulate their profits if they show deteriorating gross margins, operating expenses, and leverage against growing revenue.
Depreciation And Amortization
342 Million
At present, Diageo PLC's Depreciation And Amortization is projected to decrease significantly based on the last few years of reporting.
Diageo PLC Earnings Manipulation Drivers
Although earnings manipulation is typically not the result of intentional misconduct by the c-level executives, it is still a widespread practice by the senior management of public companies such as Diageo PLC. It is usually done by a series of misrepresentations of various accounting rules and operating activities across multiple financial cycles. The best way to spot the manipulation is to examine the historical financial statement to find inconsistencies in earning reports to find trends in assets or liabilities that are not sustainable in the future.
Some studies have found that companies with high sustainability scores are getting higher valuations than competitors with lower social-engagement activities. While most ESG disclosures are voluntary and do not directly affect the long term financial condition, Diageo PLC's sustainability indicators can be used to identify proper investment strategies using environmental, social, and governance scores that are crucial to Diageo PLC's managers, analysts, and investors.
Environment Score
Governance Score
Social Score
About Diageo PLC Fundamental Analysis
The Macroaxis Fundamental Analysis modules help investors analyze Diageo PLC's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of Diageo PLC using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at the intrinsic value of Diageo PLC based on its fundamental data. In general, a quantitative approach, as applied to this company, focuses on analyzing financial statements comparatively, whereas a qaualitative method uses data that is important to a company's growth but cannot be measured and presented in a numerical way.
Analyzing currently trending equities could be an opportunity to develop a better portfolio based on different market momentums that they can trigger. Utilizing the top trending stocks is also useful when creating a market-neutral strategy or pair trading technique involving a short or a long position in a currently trending equity.
Diageo PLC financial ratios help investors to determine whether Diageo Stock is cheap or expensive when compared to a particular measure, such as profits or enterprise value. In other words, they help investors to determine the cost of investment in Diageo with respect to the benefits of owning Diageo PLC security.