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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.
Bioanalytical Systems, Inc. has a M-score of -2.58 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Bioanalytical Systems, Inc. was -1.56. The lowest was -4.05. And the median was -2.77.
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 * 1.3706||+||0.528 * 0.8332||+||0.404 * 1.0665||+||0.892 * 0.8486||+||0.115 * 1.1911|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9002||+||4.679 * -0.0633||-||0.327 * 0.9724|
|This Year (Dec13) TTM:||Last Year (Dec12) TTM:|
|Accounts Receivable was $3.37 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.
Net Income was -0.662 + 0.252 + 0.576 + -0.311 = $-0.15 Mil.
Non Operating Income was -0.96 + 0.309 + 0.319 + -0.139 = $-0.47 Mil.
Cash Flow from Operations was 1.036 + 0.176 + 0.855 + -0.214 = $1.85 Mil.
|Accounts Receivable was $2.90 Mil.
Revenue was 5.803 + 6.54 + 7.186 + 6.966 = $26.50 Mil.
Gross Profit was 1.855 + 2.154 + 2.059 + 1.143 = $7.21 Mil.
Total Current Assets was $5.45 Mil.
Total Assets was $25.06 Mil.
Property, Plant and Equipment(Net PPE) was $18.17 Mil.
Depreciation, Depletion and Amortization(DDA) was $2.20 Mil.
Selling, General & Admin. Expense(SGA) was $7.65 Mil.
Total Current Liabilities was $15.64 Mil.
Long-Term Debt was $0.69 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)|
|=||(3.373 / 22.484)||/||(2.9 / 26.495)|
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)|
|=||(1.909 / 26.495)||/||(2.145 / 22.484)|
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 - (6.072 + 16.564) / 24.119)||/||(1 - (5.452 + 18.167) / 25.064)|
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))|
|=||(2.2 / (2.2 + 18.167))||/||(1.652 / (1.652 + 16.564))|
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)|
|=||(5.843 / 22.484)||/||(7.649 / 26.495)|
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)|
|=||((0.401 + 14.878) / 24.119)||/||((0.689 + 15.639) / 25.064)|
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|
|=||(-0.145 - -0.471||-||1.853)||/||24.119|
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 -2.58 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