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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 27.79. The lowest was -49.12. And the median was -2.39.
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 * 0.9499||+||0.528 * 0.9026||+||0.404 * 2.8509||+||0.892 * 0.8886||+||0.115 * 0.8917|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.1161||+||4.679 * -0.0762||-||0.327 * 1.423|
|This Year (Mar16) TTM:||Last Year (Mar15) TTM:|
|Accounts Receivable was $414 Mil.|
Revenue was 549.225 + 625.719 + 630.191 + 664.038 = $2,469 Mil.
Gross Profit was 50.31 + 56.795 + 54.284 + 55.716 = $217 Mil.
Total Current Assets was $1,360 Mil.
Total Assets was $1,859 Mil.
Property, Plant and Equipment(Net PPE) was $174 Mil.
Depreciation, Depletion and Amortization(DDA) was $51 Mil.
Selling, General & Admin. Expense(SGA) was $115 Mil.
Total Current Liabilities was $302 Mil.
Long-Term Debt was $220 Mil.
Net Income was 11.052 + 39.421 + 20.565 + 21.21 = $92 Mil.
Non Operating Income was -0.223 + 0.441 + -1.121 + 0.596 = $-0 Mil.
Cash Flow from Operations was 76.513 + 28.082 + 77.609 + 52.018 = $234 Mil.
|Accounts Receivable was $491 Mil.
Revenue was 620.925 + 709.547 + 731.302 + 716.868 = $2,779 Mil.
Gross Profit was 51.779 + 55.689 + 55.294 + 57.751 = $221 Mil.
Total Current Assets was $1,342 Mil.
Total Assets was $1,629 Mil.
Property, Plant and Equipment(Net PPE) was $187 Mil.
Depreciation, Depletion and Amortization(DDA) was $48 Mil.
Selling, General & Admin. Expense(SGA) was $116 Mil.
Total Current Liabilities was $313 Mil.
Long-Term Debt was $9 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)|
|=||(414.184 / 2469.173)||/||(490.686 / 2778.642)|
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)|
|=||(220.513 / 2778.642)||/||(217.105 / 2469.173)|
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 - (1360.364 + 173.969) / 1859.214)||/||(1 - (1342.488 + 187.049) / 1629.407)|
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))|
|=||(47.789 / (47.789 + 187.049))||/||(51.441 / (51.441 + 173.969))|
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)|
|=||(114.795 / 2469.173)||/||(115.749 / 2778.642)|
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)|
|=||((219.998 + 301.67) / 1859.214)||/||((8.665 + 312.628) / 1629.407)|
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|
|=||(92.248 - -0.307||-||234.222)||/||1859.214|
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 -2.46 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