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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 * 1.0067||+||0.528 * 0.9111||+||0.404 * 2.8096||+||0.892 * 0.8872||+||0.115 * 0.8634|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.2478||+||4.679 * -0.0873||-||0.327 * 1.4985|
|This Year (Sep16) TTM:||Last Year (Sep15) TTM:|
|Accounts Receivable was $417 Mil.|
Revenue was 574.341 + 579.342 + 549.225 + 625.719 = $2,329 Mil.
Gross Profit was 52.822 + 52.684 + 50.31 + 56.229 = $212 Mil.
Total Current Assets was $1,481 Mil.
Total Assets was $1,959 Mil.
Property, Plant and Equipment(Net PPE) was $169 Mil.
Depreciation, Depletion and Amortization(DDA) was $55 Mil.
Selling, General & Admin. Expense(SGA) was $122 Mil.
Total Current Liabilities was $401 Mil.
Long-Term Debt was $214 Mil.
Net Income was 21.742 + 12.685 + 11.052 + 39.421 = $85 Mil.
Non Operating Income was -0.383 + 0.071 + -0.223 + 0.441 = $-0 Mil.
Cash Flow from Operations was 70.432 + 81.085 + 76.513 + 28.082 = $256 Mil.
|Accounts Receivable was $467 Mil.
Revenue was 630.191 + 664.038 + 620.925 + 709.547 = $2,625 Mil.
Gross Profit was 54.564 + 55.716 + 51.779 + 55.689 = $218 Mil.
Total Current Assets was $1,392 Mil.
Total Assets was $1,667 Mil.
Property, Plant and Equipment(Net PPE) was $181 Mil.
Depreciation, Depletion and Amortization(DDA) was $49 Mil.
Selling, General & Admin. Expense(SGA) was $110 Mil.
Total Current Liabilities was $341 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)|
|=||(417.325 / 2328.627)||/||(467.241 / 2624.701)|
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)|
|=||(217.748 / 2624.701)||/||(212.045 / 2328.627)|
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 - (1480.711 + 168.806) / 1959.068)||/||(1 - (1392.161 + 181.187) / 1667.104)|
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))|
|=||(48.954 / (48.954 + 181.187))||/||(55.184 / (55.184 + 168.806))|
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)|
|=||(121.735 / 2328.627)||/||(109.966 / 2624.701)|
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)|
|=||((214.171 + 401.132) / 1959.068)||/||((8.27 + 341.159) / 1667.104)|
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|
|=||(84.9 - -0.094||-||256.112)||/||1959.068|
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 -2.52 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