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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.
Ballantyne Strong Inc has a M-score of -1.88 signals that the company is a manipulator.
During the past 13 years, the highest Beneish M-Score of Ballantyne Strong Inc was -0.99. The lowest was -4.66. And the median was -2.46.
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 * 1.9316||+||0.528 * 0.8116||+||0.404 * 2.092||+||0.892 * 0.7336||+||0.115 * 0.9554|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.8865||+||4.679 * -0.0439||-||0.327 * 1.0083|
|This Year (Jun14) TTM:||Last Year (Jun13) TTM:|
|Accounts Receivable was $19.0 Mil.|
Revenue was 22.027 + 22.021 + 32.745 + 18.855 = $95.6 Mil.
Gross Profit was 4.247 + 4.216 + 4.914 + 3.338 = $16.7 Mil.
Total Current Assets was $65.2 Mil.
Total Assets was $88.7 Mil.
Property, Plant and Equipment(Net PPE) was $14.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $2.0 Mil.
Selling, General & Admin. Expense(SGA) was $19.9 Mil.
Total Current Liabilities was $17.5 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 0.381 + -0.594 + -1.724 + 0.046 = $-1.9 Mil.
Non Operating Income was -0.123 + 0.304 + 0.156 + -0.031 = $0.3 Mil.
Cash Flow from Operations was 1.417 + -2.557 + 2.729 + 0.104 = $1.7 Mil.
|Accounts Receivable was $13.4 Mil.
Revenue was 24.395 + 27.621 + 39.097 + 39.26 = $130.4 Mil.
Gross Profit was 4.68 + 3.914 + 6.176 + 3.721 = $18.5 Mil.
Total Current Assets was $76.4 Mil.
Total Assets was $91.1 Mil.
Property, Plant and Equipment(Net PPE) was $10.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.3 Mil.
Selling, General & Admin. Expense(SGA) was $14.4 Mil.
Total Current Liabilities was $17.8 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)|
|=||(18.96 / 95.648)||/||(13.379 / 130.373)|
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)|
|=||(4.216 / 130.373)||/||(4.247 / 95.648)|
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 - (65.155 + 14.366) / 88.703)||/||(1 - (76.353 + 10.264) / 91.126)|
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))|
|=||(1.344 / (1.344 + 10.264))||/||(1.981 / (1.981 + 14.366))|
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)|
|=||(19.868 / 95.648)||/||(14.355 / 130.373)|
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 + 17.458) / 88.703)||/||((0 + 17.788) / 91.126)|
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|
|=||(-1.891 - 0.306||-||1.693)||/||88.703|
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 -1.88 signals that the company is likely to 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
Ballantyne Strong Inc Annual Data
Ballantyne Strong Inc Quarterly Data