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GuruFocus has detected 3 Warning Signs with Benchmark Electronics Inc $BHE.
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Benchmark Electronics Inc (NYSE:BHE)
Beneish M-Score
-3.19 (As of Today)

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.

Benchmark Electronics Inc has a M-score of -3.19 suggests that the company is not a manipulator.

BHE' s Beneish M-Score Range Over the Past 10 Years
Min: -4.19   Max: -1.32
Current: -3.19

-4.19
-1.32

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.


Definition

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
=-3.19

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

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

Measured as the ratio of days’ sales in receivables in year t to year t-1.

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)
=0.19074149 / 0.18857298
=1.0115

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.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(218.968 / 2540.873) / (213.286 / 2310.415)
=0.08617825 / 0.09231502
=0.9335

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

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)
=0.15052925 / 0.17270384
=0.8716

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.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=2310.415 / 2540.873
=0.9093

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))
=0.21801073 / 0.24917415
=0.8749

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)
=0.05152581 / 0.04294233
=1.1999

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)
=0.31202431 / 0.2935791
=1.0628

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(64.047 - -0.282 - 272.52) / 1998.668
=-0.1042

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.


Related Terms

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


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Benchmark Electronics Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.04650.97781.22570.95030.9960.98391.20070.83311.01361.0115
GMI 1.00631.00220.96820.89921.26610.86050.96250.94460.91280.934
AQI 2.00610.56140.96250.92481.01560.82071.05290.81572.71550.8716
SGI 1.0030.88830.80661.14980.93791.09551.01551.11590.90840.9093
DEPI 0.85980.99250.96781.00671.5590.90590.93180.92180.90040.8749
SGAI 1.34861.0941.15020.93841.03640.91581.08741.01381.05271.161
LVGI 0.84151.00520.97150.93931.07460.93861.08490.89231.33681.0628
TATA -0.108-0.21-0.04640.0516-0.0015-0.06310.0075-0.0314-0.0265-0.1042
M-score -2.55-3.78-2.71-2.20-2.37-2.83-2.30-2.76-2.16-3.19

Benchmark Electronics Inc Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 1.05650.83310.98870.99770.94821.01360.94990.96331.00671.0115
GMI 0.91680.94460.96980.98290.94730.9140.90280.8930.91010.9335
AQI 1.00380.81570.79650.77530.85962.71552.85092.9222.80960.8716
SGI 1.19331.11591.06731.00480.92280.90840.88860.87480.88720.9093
DEPI 0.95260.92180.90060.89410.90430.90040.89170.87640.86340.8749
SGAI 1.06251.01381.00241.00580.98611.06881.12271.18351.24141.1999
LVGI 1.03810.89230.84790.95220.84561.33681.4231.35591.49851.0628
TATA 0.0088-0.03140.0094-0.0079-0.0358-0.0265-0.0762-0.0941-0.0873-0.1042
M-score -2.29-2.76-2.45-2.61-2.81-2.16-2.46-2.51-2.52-3.19
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