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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 -3.01 suggests that the company is not a manipulator.
During the past 8 years, the highest Beneish M-Score of Bridgepoint Education Inc was -1.44. The lowest was -3.43. And the median was -2.60.
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 * 0.741||+||0.528 * 1.1086||+||0.404 * 1.4632||+||0.892 * 0.7845||+||0.115 * 0.8163|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.1746||+||4.679 * -0.0502||-||0.327 * 1.1639|
|This Year (Jun14) TTM:||Last Year (Jun13) TTM:|
|Accounts Receivable was $26.8 Mil.|
Revenue was 171.522 + 157.27 + 162.225 + 182.768 = $673.8 Mil.
Gross Profit was 94.669 + 74.189 + 71.684 + 99.206 = $339.7 Mil.
Total Current Assets was $331.2 Mil.
Total Assets was $555.5 Mil.
Property, Plant and Equipment(Net PPE) was $88.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $23.3 Mil.
Selling, General & Admin. Expense(SGA) was $315.5 Mil.
Total Current Liabilities was $163.0 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 12.955 + -4.33 + -5.109 + 14.211 = $17.7 Mil.
Non Operating Income was 0.712 + 0.367 + 0.711 + 0.786 = $2.6 Mil.
Cash Flow from Operations was 12.658 + -16.499 + 23.778 + 23.084 = $43.0 Mil.
|Accounts Receivable was $46.1 Mil.
Revenue was 193.47 + 212.986 + 206.521 + 245.917 = $858.9 Mil.
Gross Profit was 93.867 + 115.958 + 109.036 + 161.251 = $480.1 Mil.
Total Current Assets was $534.4 Mil.
Total Assets was $755.1 Mil.
Property, Plant and Equipment(Net PPE) was $94.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $19.4 Mil.
Selling, General & Admin. Expense(SGA) was $342.4 Mil.
Total Current Liabilities was $190.3 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)|
|=||(26.806 / 673.785)||/||(46.112 / 858.894)|
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)|
|=||(74.189 / 858.894)||/||(94.669 / 673.785)|
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 - (331.193 + 88.694) / 555.474)||/||(1 - (534.395 + 94.719) / 755.08)|
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))|
|=||(19.378 / (19.378 + 94.719))||/||(23.3 / (23.3 + 88.694))|
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)|
|=||(315.538 / 673.785)||/||(342.425 / 858.894)|
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 + 162.964) / 555.474)||/||((0 + 190.331) / 755.08)|
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|
|=||(17.727 - 2.576||-||43.021)||/||555.474|
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 -3.01 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