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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 -2.72.
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 * 1.1001||+||0.528 * 1.0241||+||0.404 * 0.7958||+||0.892 * 1.0767||+||0.115 * 0.9961|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0534||+||4.679 * -0.0373||-||0.327 * 0.9265|
* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.
|This Year (Dec14) TTM:||Last Year (Dec13) TTM:|
|Accounts Receivable was $2.84 Mil.|
Revenue was 5.845 + 6.42 + 6.032 + 5.912 = $24.21 Mil.
Gross Profit was 1.904 + 1.821 + 1.984 + 2.012 = $7.72 Mil.
Total Current Assets was $6.89 Mil.
Total Assets was $23.75 Mil.
Property, Plant and Equipment(Net PPE) was $15.70 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.57 Mil.
Selling, General & Admin. Expense(SGA) was $6.63 Mil.
Total Current Liabilities was $9.45 Mil.
Long-Term Debt was $4.49 Mil.
Net Income was 0.182 + -0.404 + 0.215 + -0.219 = $-0.23 Mil.
Non Operating Income was 0.122 + 0.18 + 0.067 + -0.196 = $0.17 Mil.
Cash Flow from Operations was -0.161 + 0.469 + 0.21 + -0.031 = $0.49 Mil.
|Accounts Receivable was $2.40 Mil.
Revenue was 6.22 + 5.508 + 5.6 + 5.156 = $22.48 Mil.
Gross Profit was 2.145 + 1.909 + 2.032 + 1.258 = $7.34 Mil.
Total Current Assets was $6.07 Mil.
Total Assets was $24.12 Mil.
Property, Plant and Equipment(Net PPE) was $16.56 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.65 Mil.
Selling, General & Admin. Expense(SGA) was $5.84 Mil.
Total Current Liabilities was $14.88 Mil.
Long-Term Debt was $0.40 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)|
|=||(2.838 / 24.209)||/||(2.396 / 22.484)|
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)|
|=||(1.821 / 22.484)||/||(1.904 / 24.209)|
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 - (6.892 + 15.695) / 23.749)||/||(1 - (6.072 + 16.564) / 24.119)|
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))|
|=||(1.652 / (1.652 + 16.564))||/||(1.572 / (1.572 + 15.695))|
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)|
|=||(6.627 / 24.209)||/||(5.843 / 22.484)|
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)|
|=||((4.488 + 9.451) / 23.749)||/||((0.401 + 14.878) / 24.119)|
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|
|=||(-0.226 - 0.173||-||0.487)||/||23.749|
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 -2.55 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