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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 9 years, the highest Beneish M-Score of Bridgepoint Education Inc was -2.12. The lowest was -3.44. And the median was -2.44.
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 * 1.0905||+||0.528 * 1.0195||+||0.404 * 1.7043||+||0.892 * 0.85||+||0.115 * 0.8343|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.142||+||4.679 * -0.033||-||0.327 * 0.8524|
|This Year (Dec14) TTM:||Last Year (Dec13) TTM:|
|Accounts Receivable was $21.3 Mil.|
Revenue was 147.259 + 162.654 + 171.522 + 157.27 = $638.7 Mil.
Gross Profit was 65.588 + 82.947 + 94.669 + 74.189 = $317.4 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 $303.1 Mil.
Total Current Liabilities was $160.5 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -5.248 + 6.291 + 12.955 + -4.33 = $9.7 Mil.
Non Operating Income was 0.725 + 1.08 + 0.712 + 0.367 = $2.9 Mil.
Cash Flow from Operations was 0.635 + 28.425 + 12.658 + -16.499 = $25.2 Mil.
|Accounts Receivable was $23.0 Mil.
Revenue was 162.225 + 182.768 + 193.47 + 212.986 = $751.4 Mil.
Gross Profit was 71.684 + 99.206 + 93.867 + 115.958 = $380.7 Mil.
Total Current Assets was $377.6 Mil.
Total Assets was $570.0 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 $192.3 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)|
|=||(21.274 / 638.705)||/||(22.953 / 751.449)|
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)|
|=||(82.947 / 751.449)||/||(65.588 / 638.705)|
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 - (311.384 + 78.219) / 558.095)||/||(1 - (377.615 + 91.425) / 570.012)|
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))|
|=||(21.666 / (21.666 + 91.425))||/||(23.317 / (23.317 + 78.219))|
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)|
|=||(303.082 / 638.705)||/||(312.252 / 751.449)|
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 + 160.464) / 558.095)||/||((0 + 192.276) / 570.012)|
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|
|=||(9.668 - 2.884||-||25.219)||/||558.095|
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 -2.39 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