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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.
Bridgepoint Education, Inc. has a M-score of -3.38 suggests that the company is not a manipulator.
During the past 8 years, the highest Beneish M-Score of Bridgepoint Education, Inc. was -2.12. The lowest was -3.38. And the median was -2.46.
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 Bridgepoint Education, 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 * 0.5332||+||0.528 * 1.287||+||0.404 * 0.8092||+||0.892 * 0.7939||+||0.115 * 0.8021|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9623||+||4.679 * -0.066||-||0.327 * 1.1241|
|This Year (Dec13) TTM:||Last Year (Dec12) TTM:|
|Accounts Receivable was $29.7 Mil.|
Revenue was 163.453 + 185.612 + 197.574 + 221.984 = $768.6 Mil.
Gross Profit was 67.42 + 93.408 + 91.529 + 120.338 = $372.7 Mil.
Total Current Assets was $381.6 Mil.
Total Assets was $574.0 Mil.
Property, Plant and Equipment(Net PPE) was $91.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $21.7 Mil.
Selling, General & Admin. Expense(SGA) was $312.3 Mil.
Total Current Liabilities was $192.7 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -6.46 + 10.135 + 10.368 + 26.967 = $41.0 Mil.
Non Operating Income was 0.71 + 0.787 + 1.031 + 0.818 = $3.3 Mil.
Cash Flow from Operations was 21.261 + 22.004 + 16.657 + 15.616 = $75.5 Mil.
|Accounts Receivable was $70.1 Mil.
Revenue was 209.356 + 252.076 + 256.302 + 250.437 = $968.2 Mil.
Gross Profit was 105.844 + 161.09 + 171.023 + 166.213 = $604.2 Mil.
Total Current Assets was $491.6 Mil.
Total Assets was $750.8 Mil.
Property, Plant and Equipment(Net PPE) was $96.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $17.4 Mil.
Selling, General & Admin. Expense(SGA) was $408.7 Mil.
Total Current Liabilities was $224.3 Mil.
Long-Term Debt was $0.0 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)|
|=||(29.694 / 768.623)||/||(70.148 / 968.171)|
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)|
|=||(93.408 / 968.171)||/||(67.42 / 768.623)|
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 - (381.582 + 91.425) / 573.979)||/||(1 - (491.605 + 95.966) / 750.787)|
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))|
|=||(17.424 / (17.424 + 95.966))||/||(21.666 / (21.666 + 91.425))|
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)|
|=||(312.252 / 768.623)||/||(408.706 / 968.171)|
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)|
|=||((0 + 192.742) / 573.979)||/||((0 + 224.285) / 750.787)|
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|
|=||(41.01 - 3.346||-||75.538)||/||573.979|
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.
Bridgepoint Education, Inc. has a M-score of -3.38 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
Bridgepoint Education, Inc. Annual Data
Bridgepoint Education, Inc. Quarterly Data