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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.
During the past 13 years, the highest Beneish M-Score of Bioanalytical Systems Inc was -1.43. The lowest was -3.99. And the median was -2.71.
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 Bioanalytical Systems Inc 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 * 1.1574||+||0.528 * 1.024||+||0.404 * 0.7837||+||0.892 * 1.0198||+||0.115 * 1.044|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.8655||+||4.679 * -0.033||-||0.327 * 0.8451|
|This Year (Jun15) TTM:||Last Year (Jun14) TTM:|
|Accounts Receivable was $3.23 Mil.|
Revenue was 6.15 + 5.726 + 5.845 + 6.42 = $24.14 Mil.
Gross Profit was 2.49 + 1.802 + 1.904 + 1.821 = $8.02 Mil.
Total Current Assets was $6.67 Mil.
Total Assets was $23.36 Mil.
Property, Plant and Equipment(Net PPE) was $15.55 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.47 Mil.
Selling, General & Admin. Expense(SGA) was $5.76 Mil.
Total Current Liabilities was $7.93 Mil.
Long-Term Debt was $3.96 Mil.
Net Income was 1.478 + 0.15 + 0.182 + -0.404 = $1.41 Mil.
Non Operating Income was 0.034 + 0.198 + 0.122 + 0.18 = $0.53 Mil.
Cash Flow from Operations was 0.735 + 0.601 + -0.161 + 0.469 = $1.64 Mil.
|Accounts Receivable was $2.73 Mil.
Revenue was 6.032 + 5.912 + 6.22 + 5.508 = $23.67 Mil.
Gross Profit was 1.984 + 2.012 + 2.145 + 1.909 = $8.05 Mil.
Total Current Assets was $7.12 Mil.
Total Assets was $24.86 Mil.
Property, Plant and Equipment(Net PPE) was $16.18 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.61 Mil.
Selling, General & Admin. Expense(SGA) was $6.53 Mil.
Total Current Liabilities was $9.97 Mil.
Long-Term Debt was $5.01 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(3.227 / 24.141)||/||(2.734 / 23.672)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(1.802 / 23.672)||/||(2.49 / 24.141)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (6.674 + 15.546) / 23.364)||/||(1 - (7.123 + 16.18) / 24.856)|
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.
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))|
|=||(1.605 / (1.605 + 16.18))||/||(1.471 / (1.471 + 15.546))|
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)|
|=||(5.761 / 24.141)||/||(6.527 / 23.672)|
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)|
|=||((3.964 + 7.933) / 23.364)||/||((5.012 + 9.965) / 24.856)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(1.406 - 0.534||-||1.644)||/||23.364|
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.
Bioanalytical Systems Inc has a M-score of -2.47 suggests that the company will not be a manipulator.
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
Bioanalytical Systems Inc Annual Data
Bioanalytical Systems Inc Quarterly Data