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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 -3.18 suggests that the company is not a manipulator.
During the past 8 years, the highest Beneish M-Score of Bridgepoint Education Inc was -1.46. The lowest was -3.44. And the median was -2.43.
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 * 0.7633||+||0.528 * 0.9292||+||0.404 * 1.5905||+||0.892 * 0.804||+||0.115 * 0.8407|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.4014||+||4.679 * -0.0708||-||0.327 * 1.2645|
|This Year (Sep14) TTM:||Last Year (Sep13) TTM:|
|Accounts Receivable was $31.4 Mil.|
Revenue was 162.654 + 171.522 + 157.27 + 163.453 = $654.9 Mil.
Gross Profit was 82.947 + 94.669 + 74.189 + 67.42 = $319.2 Mil.
Total Current Assets was $332.0 Mil.
Total Assets was $568.3 Mil.
Property, Plant and Equipment(Net PPE) was $88.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $23.7 Mil.
Selling, General & Admin. Expense(SGA) was $305.9 Mil.
Total Current Liabilities was $168.4 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 6.291 + 12.955 + -4.33 + -6.46 = $8.5 Mil.
Non Operating Income was 1.08 + 0.712 + 0.367 + 0.71 = $2.9 Mil.
Cash Flow from Operations was 28.425 + 12.658 + -16.499 + 21.261 = $45.8 Mil.
|Accounts Receivable was $51.1 Mil.
Revenue was 185.612 + 197.574 + 221.984 + 209.356 = $814.5 Mil.
Gross Profit was 93.408 + 91.529 + 120.338 + 63.652 = $368.9 Mil.
Total Current Assets was $545.2 Mil.
Total Assets was $765.2 Mil.
Property, Plant and Equipment(Net PPE) was $94.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $20.5 Mil.
Selling, General & Admin. Expense(SGA) was $271.5 Mil.
Total Current Liabilities was $179.3 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)|
|=||(31.375 / 654.899)||/||(51.123 / 814.526)|
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)|
|=||(94.669 / 814.526)||/||(82.947 / 654.899)|
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 - (332.048 + 88.098) / 568.299)||/||(1 - (545.196 + 94.57) / 765.19)|
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))|
|=||(20.524 / (20.524 + 94.57))||/||(23.719 / (23.719 + 88.098))|
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)|
|=||(305.944 / 654.899)||/||(271.525 / 814.526)|
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 + 168.419) / 568.299)||/||((0 + 179.336) / 765.19)|
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|
|=||(8.456 - 2.869||-||45.845)||/||568.299|
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 -3.18 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