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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 -1.44. The lowest was -3.53. And the median was -2.79.
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 * 1.1678||+||0.528 * 0.992||+||0.404 * 0.7666||+||0.892 * 0.906||+||0.115 * 0.4957|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.1064||+||4.679 * -0.1848||-||0.327 * 1.1312|
|This Year (Jun16) TTM:||Last Year (Jun15) TTM:|
|Accounts Receivable was $29.8 Mil.|
Revenue was 137.97 + 133.002 + 131.392 + 140.762 = $543.1 Mil.
Gross Profit was 71.522 + 63.416 + 65.552 + 71.565 = $272.1 Mil.
Total Current Assets was $394.5 Mil.
Total Assets was $486.3 Mil.
Property, Plant and Equipment(Net PPE) was $17.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $15.9 Mil.
Selling, General & Admin. Expense(SGA) was $269.2 Mil.
Total Current Liabilities was $155.9 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 3.338 + -10.112 + -6.687 + -62.746 = $-76.2 Mil.
Non Operating Income was 0.652 + 0.683 + 0.607 + 0.465 = $2.4 Mil.
Cash Flow from Operations was 16.482 + -17.17 + 10.074 + 1.873 = $11.3 Mil.
|Accounts Receivable was $28.2 Mil.
Revenue was 147.057 + 142.518 + 147.259 + 162.654 = $599.5 Mil.
Gross Profit was 75.647 + 67.469 + 71.821 + 82.947 = $297.9 Mil.
Total Current Assets was $379.2 Mil.
Total Assets was $562.5 Mil.
Property, Plant and Equipment(Net PPE) was $71.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $22.0 Mil.
Selling, General & Admin. Expense(SGA) was $268.6 Mil.
Total Current Liabilities was $159.4 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)|
|=||(29.797 / 543.126)||/||(28.164 / 599.488)|
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)|
|=||(297.884 / 599.488)||/||(272.055 / 543.126)|
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 - (394.503 + 17.429) / 486.343)||/||(1 - (379.2 + 71.068) / 562.548)|
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))|
|=||(21.974 / (21.974 + 71.068))||/||(15.862 / (15.862 + 17.429))|
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)|
|=||(269.241 / 543.126)||/||(268.595 / 599.488)|
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 + 155.859) / 486.343)||/||((0 + 159.366) / 562.548)|
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|
|=||(-76.207 - 2.407||-||11.259)||/||486.343|
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 -3.49 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