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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 -2.77.
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 * 1.5419||+||0.528 * 1.2378||+||0.404 * 0.1134||+||0.892 * 0.9987||+||0.115 * 0.8846|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.117||+||4.679 * -0.2476||-||0.327 * 1.2113|
|This Year (Dec16) TTM:||Last Year (Dec15) TTM:|
|Accounts Receivable was $2.45 Mil.|
Revenue was 6.174 + 5.154 + 5.053 + 5.339 = $21.72 Mil.
Gross Profit was 1.859 + 0.952 + 1.173 + 1.316 = $5.30 Mil.
Total Current Assets was $5.13 Mil.
Total Assets was $21.12 Mil.
Property, Plant and Equipment(Net PPE) was $15.87 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.61 Mil.
Selling, General & Admin. Expense(SGA) was $6.30 Mil.
Total Current Liabilities was $13.45 Mil.
Long-Term Debt was $0.17 Mil.
Net Income was 0.017 + -2.037 + -0.433 + -0.254 = $-2.71 Mil.
Non Operating Income was 0.001 + 0.004 + 0.022 + 0.079 = $0.11 Mil.
Cash Flow from Operations was 1.009 + 0.79 + 0.144 + 0.474 = $2.42 Mil.
|Accounts Receivable was $1.59 Mil.
Revenue was 4.895 + 4.977 + 6.15 + 5.726 = $21.75 Mil.
Gross Profit was 0.984 + 1.293 + 2.49 + 1.802 = $6.57 Mil.
Total Current Assets was $4.85 Mil.
Total Assets was $21.78 Mil.
Property, Plant and Equipment(Net PPE) was $15.80 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.40 Mil.
Selling, General & Admin. Expense(SGA) was $5.65 Mil.
Total Current Liabilities was $11.53 Mil.
Long-Term Debt was $0.06 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)|
|=||(2.45 / 21.72)||/||(1.591 / 21.748)|
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)|
|=||(6.569 / 21.748)||/||(5.3 / 21.72)|
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 - (5.129 + 15.867) / 21.12)||/||(1 - (4.846 + 15.802) / 21.775)|
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))|
|=||(1.402 / (1.402 + 15.802))||/||(1.61 / (1.61 + 15.867))|
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)|
|=||(6.303 / 21.72)||/||(5.65 / 21.748)|
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)|
|=||((0.166 + 13.447) / 21.12)||/||((0.058 + 11.529) / 21.775)|
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|
|=||(-2.707 - 0.106||-||2.417)||/||21.12|
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 -3.48 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