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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 -3.91. 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 * 0.6339||+||0.528 * 0.987||+||0.404 * 0.8682||+||0.892 * 1.1141||+||0.115 * 1.0158|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0259||+||4.679 * -0.0776||-||0.327 * 0.9485|
|This Year (Sep14) TTM:||Last Year (Sep13) TTM:|
|Accounts Receivable was $2.56 Mil.|
Revenue was 6.42 + 6.032 + 5.912 + 6.22 = $24.58 Mil.
Gross Profit was 1.821 + 1.984 + 2.012 + 2.145 = $7.96 Mil.
Total Current Assets was $6.66 Mil.
Total Assets was $23.77 Mil.
Property, Plant and Equipment(Net PPE) was $15.95 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.60 Mil.
Selling, General & Admin. Expense(SGA) was $6.60 Mil.
Total Current Liabilities was $9.47 Mil.
Long-Term Debt was $4.75 Mil.
Net Income was -0.404 + 0.215 + -0.219 + -0.662 = $-1.07 Mil.
Non Operating Income was 0.18 + 0.067 + -0.196 + -0.96 = $-0.91 Mil.
Cash Flow from Operations was 0.469 + 0.21 + -0.031 + 1.036 = $1.68 Mil.
|Accounts Receivable was $3.62 Mil.
Revenue was 5.508 + 5.6 + 5.156 + 5.803 = $22.07 Mil.
Gross Profit was 1.909 + 2.032 + 1.258 + 1.855 = $7.05 Mil.
Total Current Assets was $7.23 Mil.
Total Assets was $25.60 Mil.
Property, Plant and Equipment(Net PPE) was $16.91 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.72 Mil.
Selling, General & Admin. Expense(SGA) was $5.77 Mil.
Total Current Liabilities was $11.03 Mil.
Long-Term Debt was $5.11 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)|
|=||(2.557 / 24.584)||/||(3.621 / 22.067)|
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)|
|=||(1.984 / 22.067)||/||(1.821 / 24.584)|
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 - (6.655 + 15.949) / 23.774)||/||(1 - (7.233 + 16.913) / 25.597)|
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))|
|=||(1.723 / (1.723 + 16.913))||/||(1.597 / (1.597 + 15.949))|
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)|
|=||(6.596 / 24.584)||/||(5.771 / 22.067)|
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)|
|=||((4.75 + 9.467) / 23.774)||/||((5.112 + 11.026) / 25.597)|
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|
|=||(-1.07 - -0.909||-||1.684)||/||23.774|
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 -3.12 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