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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 -4.07. And the median was -2.67.
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 * 0.6305||+||0.528 * 1.5241||+||0.404 * 0.1234||+||0.892 * 0.9006||+||0.115 * 0.9376|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.1356||+||4.679 * -0.2122||-||0.327 * 1.1822|
|This Year (Sep16) TTM:||Last Year (Sep15) TTM:|
|Accounts Receivable was $1.65 Mil.|
Revenue was 5.154 + 5.053 + 5.339 + 4.895 = $20.44 Mil.
Gross Profit was 0.952 + 1.173 + 1.316 + 0.984 = $4.43 Mil.
Total Current Assets was $4.88 Mil.
Total Assets was $21.14 Mil.
Property, Plant and Equipment(Net PPE) was $16.14 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.56 Mil.
Selling, General & Admin. Expense(SGA) was $6.00 Mil.
Total Current Liabilities was $13.48 Mil.
Long-Term Debt was $0.20 Mil.
Net Income was -2.037 + -0.433 + -0.254 + -0.506 = $-3.23 Mil.
Non Operating Income was 0.004 + 0.022 + 0.079 + 0.09 = $0.20 Mil.
Cash Flow from Operations was 0.79 + 0.144 + 0.474 + -0.348 = $1.06 Mil.
|Accounts Receivable was $2.90 Mil.
Revenue was 4.977 + 6.15 + 5.726 + 5.845 = $22.70 Mil.
Gross Profit was 1.293 + 2.49 + 1.802 + 1.904 = $7.49 Mil.
Total Current Assets was $6.68 Mil.
Total Assets was $23.82 Mil.
Property, Plant and Equipment(Net PPE) was $15.99 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.44 Mil.
Selling, General & Admin. Expense(SGA) was $5.87 Mil.
Total Current Liabilities was $9.30 Mil.
Long-Term Debt was $3.73 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)|
|=||(1.649 / 20.441)||/||(2.904 / 22.698)|
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)|
|=||(7.489 / 22.698)||/||(4.425 / 20.441)|
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 - (4.877 + 16.136) / 21.139)||/||(1 - (6.676 + 15.989) / 23.815)|
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))|
|=||(1.437 / (1.437 + 15.989))||/||(1.556 / (1.556 + 16.136))|
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)|
|=||(5.998 / 20.441)||/||(5.865 / 22.698)|
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)|
|=||((0.198 + 13.483) / 21.139)||/||((3.734 + 9.303) / 23.815)|
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|
|=||(-3.23 - 0.195||-||1.06)||/||21.139|
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 -4.07 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