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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.
BGC Partners, Inc. has a M-score of -2.56 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of BGC Partners, Inc. was 0.82. The lowest was -4.43. And the median was -2.64.
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 BGC Partners, 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 * 0.725||+||0.528 * 1||+||0.404 * 0.9191||+||0.892 * 1.4137||+||0.115 * 0.9838|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9169||+||4.679 * -0.0426||-||0.327 * 0.9302|
* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.
|This Year (Dec13) TTM:||Last Year (Dec12) TTM:|
|Accounts Receivable was $759 Mil.|
Revenue was 426.605 + 433.345 + 1193.167 + 444.969 = $2,498 Mil.
Gross Profit was 426.605 + 433.345 + 1193.167 + 444.969 = $2,498 Mil.
Total Current Assets was $1,562 Mil.
Total Assets was $2,079 Mil.
Property, Plant and Equipment(Net PPE) was $128 Mil.
Depreciation, Depletion and Amortization(DDA) was $47 Mil.
Selling, General & Admin. Expense(SGA) was $2,090 Mil.
Total Current Liabilities was $901 Mil.
Long-Term Debt was $258 Mil.
Net Income was 4.134 + 25.326 + 34.466 + 6.998 = $71 Mil.
Non Operating Income was -2.071 + -1.563 + -1.651 + -1.548 = $-7 Mil.
Cash Flow from Operations was 63.807 + 42.535 + 52.507 + 7.517 = $166 Mil.
|Accounts Receivable was $740 Mil.
Revenue was 482.177 + 440.317 + 449.538 + 394.961 = $1,767 Mil.
Gross Profit was 482.177 + 440.317 + 449.538 + 394.961 = $1,767 Mil.
Total Current Assets was $1,164 Mil.
Total Assets was $1,639 Mil.
Property, Plant and Equipment(Net PPE) was $141 Mil.
Depreciation, Depletion and Amortization(DDA) was $51 Mil.
Selling, General & Admin. Expense(SGA) was $1,612 Mil.
Total Current Liabilities was $681 Mil.
Long-Term Debt was $301 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)|
|=||(758.604 / 2498.086)||/||(740.085 / 1766.993)|
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)|
|=||(433.345 / 1766.993)||/||(426.605 / 2498.086)|
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 - (1562.331 + 127.615) / 2079.363)||/||(1 - (1163.889 + 141.109) / 1638.939)|
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))|
|=||(50.985 / (50.985 + 141.109))||/||(47.152 / (47.152 + 127.615))|
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)|
|=||(2089.663 / 2498.086)||/||(1612.126 / 1766.993)|
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)|
|=||((258.356 + 901.342) / 2079.363)||/||((301.444 + 681.244) / 1638.939)|
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|
|=||(70.924 - -6.833||-||166.366)||/||2079.363|
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.
BGC Partners, Inc. has a M-score of -2.56 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
BGC Partners, Inc. Annual Data
BGC Partners, Inc. Quarterly Data