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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 10 years, the highest Beneish M-Score of Bridgepoint Education Inc was -2.11. The lowest was -3.53. And the median was -2.77.
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 * 1.2876||+||0.528 * 1.0157||+||0.404 * 0.5343||+||0.892 * 0.8795||+||0.115 * 0.4847|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9881||+||4.679 * -0.1959||-||0.327 * 1.1527|
|This Year (Dec15) TTM:||Last Year (Dec14) TTM:|
|Accounts Receivable was $24.1 Mil.|
Revenue was 131.392 + 140.762 + 147.057 + 142.518 = $561.7 Mil.
Gross Profit was 65.552 + 71.565 + 75.647 + 67.469 = $280.2 Mil.
Total Current Assets was $403.3 Mil.
Total Assets was $506.8 Mil.
Property, Plant and Equipment(Net PPE) was $21.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $19.6 Mil.
Selling, General & Admin. Expense(SGA) was $254.2 Mil.
Total Current Liabilities was $168.0 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -6.687 + -62.746 + -0.65 + -0.371 = $-70.5 Mil.
Non Operating Income was 0.607 + 0.465 + 0.345 + 0.689 = $2.1 Mil.
Cash Flow from Operations was 10.074 + 1.873 + 7.38 + 7.388 = $26.7 Mil.
|Accounts Receivable was $21.3 Mil.
Revenue was 147.259 + 162.654 + 171.522 + 157.27 = $638.7 Mil.
Gross Profit was 71.821 + 82.947 + 94.669 + 74.189 = $323.6 Mil.
Total Current Assets was $311.4 Mil.
Total Assets was $558.1 Mil.
Property, Plant and Equipment(Net PPE) was $78.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $23.3 Mil.
Selling, General & Admin. Expense(SGA) was $292.5 Mil.
Total Current Liabilities was $160.5 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)|
|=||(24.091 / 561.729)||/||(21.274 / 638.705)|
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)|
|=||(71.565 / 638.705)||/||(65.552 / 561.729)|
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 - (403.275 + 21.742) / 506.766)||/||(1 - (311.384 + 78.219) / 558.095)|
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))|
|=||(23.317 / (23.317 + 78.219))||/||(19.578 / (19.578 + 21.742))|
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)|
|=||(254.172 / 561.729)||/||(292.487 / 638.705)|
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 + 167.952) / 506.766)||/||((0 + 160.464) / 558.095)|
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|
|=||(-70.454 - 2.106||-||26.715)||/||506.766|
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 -3.53 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