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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 Benchmark Electronics Inc was -1.32. The lowest was -4.19. And the median was -2.47.
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 Benchmark Electronics 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 * 1.0115||+||0.528 * 0.9335||+||0.404 * 0.8716||+||0.892 * 0.9093||+||0.115 * 0.8749|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.1999||+||4.679 * -0.1042||-||0.327 * 1.0628|
|This Year (Dec16) TTM:||Last Year (Dec15) TTM:|
|Accounts Receivable was $441 Mil.|
Revenue was 607.507 + 574.341 + 579.342 + 549.225 = $2,310 Mil.
Gross Profit was 57.47 + 52.822 + 52.684 + 50.31 = $213 Mil.
Total Current Assets was $1,532 Mil.
Total Assets was $1,999 Mil.
Property, Plant and Equipment(Net PPE) was $166 Mil.
Depreciation, Depletion and Amortization(DDA) was $55 Mil.
Selling, General & Admin. Expense(SGA) was $119 Mil.
Total Current Liabilities was $412 Mil.
Long-Term Debt was $211 Mil.
Net Income was 18.568 + 21.742 + 12.685 + 11.052 = $64 Mil.
Non Operating Income was 0.253 + -0.383 + 0.071 + -0.223 = $-0 Mil.
Cash Flow from Operations was 44.49 + 70.432 + 81.085 + 76.513 = $273 Mil.
|Accounts Receivable was $479 Mil.
Revenue was 625.719 + 630.191 + 664.038 + 620.925 = $2,541 Mil.
Gross Profit was 56.909 + 54.564 + 55.716 + 51.779 = $219 Mil.
Total Current Assets was $1,389 Mil.
Total Assets was $1,894 Mil.
Property, Plant and Equipment(Net PPE) was $178 Mil.
Depreciation, Depletion and Amortization(DDA) was $50 Mil.
Selling, General & Admin. Expense(SGA) was $109 Mil.
Total Current Liabilities was $333 Mil.
Long-Term Debt was $223 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)|
|=||(440.692 / 2310.415)||/||(479.14 / 2540.873)|
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)|
|=||(218.968 / 2540.873)||/||(213.286 / 2310.415)|
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 - (1531.662 + 166.148) / 1998.668)||/||(1 - (1388.628 + 178.17) / 1893.878)|
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))|
|=||(49.672 / (49.672 + 178.17))||/||(55.139 / (55.139 + 166.148))|
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)|
|=||(119.046 / 2310.415)||/||(109.111 / 2540.873)|
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)|
|=||((211.252 + 412.381) / 1998.668)||/||((222.909 + 333.094) / 1893.878)|
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|
|=||(64.047 - -0.282||-||272.52)||/||1998.668|
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.
Benchmark Electronics Inc has a M-score of -3.19 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
Benchmark Electronics Inc Annual Data
Benchmark Electronics Inc Quarterly Data