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GuruFocus has detected 2 Warning Signs with Ballantyne Strong Inc $BTN.
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Ballantyne Strong Inc (AMEX:BTN)
Beneish M-Score
-1.30 (As of Today)

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.

Ballantyne Strong Inc has a M-score of -1.30 signals that the company is a manipulator.

BTN' s Beneish M-Score Range Over the Past 10 Years
Min: -4.77   Max: -1.12
Current: -1.3

-4.77
-1.12

During the past 13 years, the highest Beneish M-Score of Ballantyne Strong Inc was -1.12. The lowest was -4.77. And the median was -2.40.


Definition

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 Ballantyne Strong 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 * 1.7122+0.528 * 0.6853+0.404 * 2.052+0.892 * 0.8634+0.115 * 1.0498
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9027+4.679 * 0.0656-0.327 * 0.8166
=-1.30

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $16.79 Mil.
Revenue was 20.391 + 18.668 + 20.558 + 20.54 = $80.16 Mil.
Gross Profit was 5.871 + 4.377 + 6.149 + 5.771 = $22.17 Mil.
Total Current Assets was $33.54 Mil.
Total Assets was $62.90 Mil.
Property, Plant and Equipment(Net PPE) was $11.70 Mil.
Depreciation, Depletion and Amortization(DDA) was $2.19 Mil.
Selling, General & Admin. Expense(SGA) was $17.24 Mil.
Total Current Liabilities was $13.65 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was 0.54 + -0.47 + 0.833 + -0.613 = $0.29 Mil.
Non Operating Income was 0.428 + -0.018 + 0.444 + -1.229 = $-0.38 Mil.
Cash Flow from Operations was -1.313 + 2.019 + -2.603 + -1.565 = $-3.46 Mil.
Accounts Receivable was $11.36 Mil.
Revenue was 27.13 + 23.512 + 19.723 + 22.47 = $92.84 Mil.
Gross Profit was 5.689 + 3.968 + 3.676 + 4.261 = $17.59 Mil.
Total Current Assets was $45.95 Mil.
Total Assets was $66.86 Mil.
Property, Plant and Equipment(Net PPE) was $11.77 Mil.
Depreciation, Depletion and Amortization(DDA) was $2.33 Mil.
Selling, General & Admin. Expense(SGA) was $22.12 Mil.
Total Current Liabilities was $17.77 Mil.
Long-Term Debt was $0.00 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(16.793 / 80.157) / (11.359 / 92.835)
=0.20950135 / 0.12235687
=1.7122

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.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(17.594 / 92.835) / (22.168 / 80.157)
=0.18951904 / 0.27655726
=0.6853

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (33.542 + 11.695) / 62.9) / (1 - (45.946 + 11.768) / 66.864)
=0.28081081 / 0.13684494
=2.052

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.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=80.157 / 92.835
=0.8634

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))
=(2.332 / (2.332 + 11.768)) / (2.187 / (2.187 + 11.695))
=0.16539007 / 0.15754214
=1.0498

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)
=(17.236 / 80.157) / (22.115 / 92.835)
=0.21502801 / 0.23821834
=0.9027

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 + 13.648) / 62.9) / ((0 + 17.767) / 66.864)
=0.21697933 / 0.26571847
=0.8166

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(0.29 - -0.375 - -3.462) / 62.9
=0.0656

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.

Ballantyne Strong Inc has a M-score of -1.30 signals that the company is likely to be a manipulator.


Related Terms

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


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Ballantyne Strong Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.0140.84311.16291.15140.96450.93551.24741.10150.57411.7885
GMI 1.18531.14480.78571.12531.10771.22590.82190.85131.00810.672
AQI 2.53231.91880.220.48652.15360.64852.07441.41851.06822.052
SGI 1.03531.06471.31621.88971.35280.91680.61280.91770.97630.8266
DEPI 0.50320.92121.23612.46440.84321.53411.10090.76630.73451.0498
SGAI 1.11051.32360.64020.61670.86251.15471.71551.30041.13410.923
LVGI 1.28761.17291.31151.50720.95470.67540.89850.8991.20350.8166
TATA 0.0444-0.1310.0110.0475-0.08450.0451-0.09270.0332-0.3830.0663
M-score -1.68-2.85-2.44-1.40-2.05-2.28-2.77-2.26-4.77-1.27

Ballantyne Strong Inc Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 1.34091.10160.93820.92450.95930.57410.75561.11030.99151.7122
GMI 0.93940.85130.91810.92390.93991.00770.90680.80420.73710.6853
AQI 1.43641.41850.88370.78810.48461.06821.65642.44714.31872.052
SGI 0.90440.91770.97470.97470.94590.97630.95150.9840.92360.8634
DEPI 0.78290.76630.78070.67090.7830.73450.7690.94840.86781.0498
SGAI 1.68611.30051.09161.09141.05931.13391.10930.95240.94440.9027
LVGI 1.17430.8991.0281.2321.20361.20351.11910.86240.83790.8166
TATA -0.02330.0332-0.1537-0.1949-0.2911-0.383-0.1585-0.0587-0.03470.0656
M-score -2.42-2.26-3.42-3.74-4.27-4.77-3.36-2.14-1.47-1.30
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