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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 -2.77.
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 * 1.2491||+||0.528 * 1.0155||+||0.404 * 0.7028||+||0.892 * 0.885||+||0.115 * 0.4808|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0708||+||4.679 * -0.1756||-||0.327 * 1.0816|
|This Year (Mar16) TTM:||Last Year (Mar15) TTM:|
|Accounts Receivable was $34.2 Mil.|
Revenue was 133.002 + 131.392 + 140.762 + 147.057 = $552.2 Mil.
Gross Profit was 63.416 + 65.552 + 71.565 + 75.647 = $276.2 Mil.
Total Current Assets was $378.7 Mil.
Total Assets was $480.9 Mil.
Property, Plant and Equipment(Net PPE) was $19.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $18.0 Mil.
Selling, General & Admin. Expense(SGA) was $264.5 Mil.
Total Current Liabilities was $153.2 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -10.112 + -6.687 + -62.746 + -0.65 = $-80.2 Mil.
Non Operating Income was 0.683 + 0.607 + 0.465 + 0.345 = $2.1 Mil.
Cash Flow from Operations was -17.17 + 10.074 + 1.873 + 7.38 = $2.2 Mil.
|Accounts Receivable was $30.9 Mil.
Revenue was 142.518 + 147.259 + 162.654 + 171.522 = $624.0 Mil.
Gross Profit was 67.469 + 71.821 + 82.947 + 94.669 = $316.9 Mil.
Total Current Assets was $349.1 Mil.
Total Assets was $562.1 Mil.
Property, Plant and Equipment(Net PPE) was $75.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $22.6 Mil.
Selling, General & Admin. Expense(SGA) was $279.1 Mil.
Total Current Liabilities was $165.6 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)|
|=||(34.179 / 552.213)||/||(30.918 / 623.953)|
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)|
|=||(65.552 / 623.953)||/||(63.416 / 552.213)|
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 - (378.734 + 19.568) / 480.877)||/||(1 - (349.053 + 75.728) / 562.125)|
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))|
|=||(22.633 / (22.633 + 75.728))||/||(17.962 / (17.962 + 19.568))|
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)|
|=||(264.509 / 552.213)||/||(279.109 / 623.953)|
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 + 153.189) / 480.877)||/||((0 + 165.568) / 562.125)|
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|
|=||(-80.195 - 2.1||-||2.157)||/||480.877|
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 -3.39 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