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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 * 0.9765||+||0.528 * 1.0979||+||0.404 * 0.9693||+||0.892 * 0.8892||+||0.115 * 1.1501|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9409||+||4.679 * -0.0922||-||0.327 * 1.0109|
|This Year (Mar16) TTM:||Last Year (Mar15) TTM:|
|Accounts Receivable was $2.63 Mil.|
Revenue was 5.339 + 4.895 + 4.977 + 6.15 = $21.36 Mil.
Gross Profit was 1.316 + 0.984 + 1.293 + 2.49 = $6.08 Mil.
Total Current Assets was $5.98 Mil.
Total Assets was $23.04 Mil.
Property, Plant and Equipment(Net PPE) was $15.94 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.35 Mil.
Selling, General & Admin. Expense(SGA) was $5.46 Mil.
Total Current Liabilities was $13.08 Mil.
Long-Term Debt was $0.05 Mil.
Net Income was -0.254 + -0.506 + -0.711 + 1.478 = $0.01 Mil.
Non Operating Income was 0.079 + 0.09 + 0.138 + 0.034 = $0.34 Mil.
Cash Flow from Operations was 0.474 + -0.348 + 0.929 + 0.735 = $1.79 Mil.
|Accounts Receivable was $3.03 Mil.
Revenue was 5.726 + 5.845 + 6.42 + 6.032 = $24.02 Mil.
Gross Profit was 1.802 + 1.904 + 1.821 + 1.984 = $7.51 Mil.
Total Current Assets was $6.40 Mil.
Total Assets was $23.01 Mil.
Property, Plant and Equipment(Net PPE) was $15.45 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.53 Mil.
Selling, General & Admin. Expense(SGA) was $6.53 Mil.
Total Current Liabilities was $8.75 Mil.
Long-Term Debt was $4.23 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)|
|=||(2.63 / 21.361)||/||(3.029 / 24.023)|
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)|
|=||(7.511 / 24.023)||/||(6.083 / 21.361)|
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 - (5.979 + 15.938) / 23.036)||/||(1 - (6.404 + 15.451) / 23.008)|
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))|
|=||(1.528 / (1.528 + 15.451))||/||(1.353 / (1.353 + 15.938))|
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)|
|=||(5.46 / 21.361)||/||(6.526 / 24.023)|
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)|
|=||((0.053 + 13.082) / 23.036)||/||((4.226 + 8.752) / 23.008)|
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|
|=||(0.007 - 0.341||-||1.79)||/||23.036|
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 -2.97 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