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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 -1.33. The lowest was -49.12. And the median was -2.51.
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 * 0.8331||+||0.528 * 0.9465||+||0.404 * 0.7652||+||0.892 * 1.1159||+||0.115 * 0.9218|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0438||+||4.679 * -0.032||-||0.327 * 0.8905|
|This Year (Dec14) TTM:||Last Year (Dec13) TTM:|
|Accounts Receivable was $520 Mil.|
Revenue was 709.547 + 731.302 + 716.868 + 639.344 = $2,797 Mil.
Gross Profit was 55.689 + 55.294 + 57.751 + 51.123 = $220 Mil.
Total Current Assets was $1,389 Mil.
Total Assets was $1,679 Mil.
Property, Plant and Equipment(Net PPE) was $190 Mil.
Depreciation, Depletion and Amortization(DDA) was $46 Mil.
Selling, General & Admin. Expense(SGA) was $116 Mil.
Total Current Liabilities was $359 Mil.
Long-Term Debt was $9 Mil.
Net Income was 24.011 + 17.156 + 22.15 + 19.125 = $82 Mil.
Non Operating Income was 0.528 + -1.105 + 0.099 + 0.026 = $-0 Mil.
Cash Flow from Operations was 22.756 + 28.211 + 24.96 + 60.734 = $137 Mil.
|Accounts Receivable was $560 Mil.
Revenue was 756.843 + 599.658 + 607.522 + 542.444 = $2,506 Mil.
Gross Profit was 59.843 + 45.44 + 44.367 + 36.834 = $186 Mil.
Total Current Assets was $1,343 Mil.
Total Assets was $1,657 Mil.
Property, Plant and Equipment(Net PPE) was $185 Mil.
Depreciation, Depletion and Amortization(DDA) was $41 Mil.
Selling, General & Admin. Expense(SGA) was $99 Mil.
Total Current Liabilities was $398 Mil.
Long-Term Debt was $10 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)|
|=||(520.389 / 2797.061)||/||(559.763 / 2506.467)|
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)|
|=||(55.294 / 2506.467)||/||(55.689 / 2797.061)|
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 - (1388.553 + 190.18) / 1678.889)||/||(1 - (1342.833 + 185.319) / 1657.371)|
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))|
|=||(40.942 / (40.942 + 185.319))||/||(46.449 / (46.449 + 190.18))|
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)|
|=||(115.7 / 2797.061)||/||(99.331 / 2506.467)|
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)|
|=||((8.845 + 359.098) / 1678.889)||/||((9.521 + 398.377) / 1657.371)|
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|
|=||(82.442 - -0.452||-||136.661)||/||1678.889|
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 -2.78 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