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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 -2.40.
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 * 0.9633||+||0.528 * 0.8928||+||0.404 * 2.922||+||0.892 * 0.8748||+||0.115 * 0.8764|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.1754||+||4.679 * -0.0941||-||0.327 * 1.3559|
* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.
|This Year (Jun16) TTM:||Last Year (Jun15) TTM:|
|Accounts Receivable was $422 Mil.|
Revenue was 579.342 + 549.225 + 625.719 + 630.191 = $2,384 Mil.
Gross Profit was 52.684 + 50.31 + 56.795 + 54.284 = $214 Mil.
Total Current Assets was $1,408 Mil.
Total Assets was $1,900 Mil.
Property, Plant and Equipment(Net PPE) was $171 Mil.
Depreciation, Depletion and Amortization(DDA) was $53 Mil.
Selling, General & Admin. Expense(SGA) was $118 Mil.
Total Current Liabilities was $347 Mil.
Long-Term Debt was $217 Mil.
Net Income was 12.685 + 11.052 + 39.421 + 20.565 = $84 Mil.
Non Operating Income was 0.071 + -0.223 + 0.441 + -1.121 = $-1 Mil.
Cash Flow from Operations was 81.085 + 76.513 + 28.082 + 77.609 = $263 Mil.
|Accounts Receivable was $501 Mil.
Revenue was 664.038 + 620.925 + 709.547 + 731.302 = $2,726 Mil.
Gross Profit was 55.716 + 51.779 + 55.689 + 55.294 = $218 Mil.
Total Current Assets was $1,400 Mil.
Total Assets was $1,683 Mil.
Property, Plant and Equipment(Net PPE) was $186 Mil.
Depreciation, Depletion and Amortization(DDA) was $49 Mil.
Selling, General & Admin. Expense(SGA) was $115 Mil.
Total Current Liabilities was $360 Mil.
Long-Term Debt was $8 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)|
|=||(421.939 / 2384.477)||/||(500.713 / 2725.812)|
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)|
|=||(218.478 / 2725.812)||/||(214.073 / 2384.477)|
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 - (1408.098 + 170.602) / 1900.149)||/||(1 - (1399.556 + 185.535) / 1682.501)|
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))|
|=||(48.73 / (48.73 + 185.535))||/||(53.092 / (53.092 + 170.602))|
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)|
|=||(118.217 / 2384.477)||/||(114.969 / 2725.812)|
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)|
|=||((217.086 + 347.342) / 1900.149)||/||((8.47 + 360.112) / 1682.501)|
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|
|=||(83.723 - -0.832||-||263.289)||/||1900.149|
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 -2.51 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