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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.
Broadwind Energy Inc has a M-score of -2.66 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Broadwind Energy Inc was 13.34. The lowest was -13.43. And the median was -2.80.
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 Broadwind Energy 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 * 0.9629||+||0.528 * 0.5119||+||0.404 * 1.2221||+||0.892 * 1.232||+||0.115 * 1.1308|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.8811||+||4.679 * -0.0515||-||0.327 * 0.9365|
* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.
|This Year (Jun14) TTM:||Last Year (Jun13) TTM:|
|Accounts Receivable was $24.7 Mil.|
Revenue was 68.381 + 58.8 + 56.397 + 60.862 = $244.4 Mil.
Gross Profit was 8.631 + 5.093 + 2.156 + 4.618 = $20.5 Mil.
Total Current Assets was $76.7 Mil.
Total Assets was $150.9 Mil.
Property, Plant and Equipment(Net PPE) was $66.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $13.1 Mil.
Selling, General & Admin. Expense(SGA) was $22.4 Mil.
Total Current Liabilities was $47.3 Mil.
Long-Term Debt was $3.3 Mil.
Net Income was 1.86 + -1.043 + -3.746 + -2.398 = $-5.3 Mil.
Non Operating Income was -0.016 + 0.136 + 0.402 + -0.005 = $0.5 Mil.
Cash Flow from Operations was 1.571 + -12.117 + 4.747 + 7.731 = $1.9 Mil.
|Accounts Receivable was $20.9 Mil.
Revenue was 52.945 + 45.506 + 44.908 + 55.045 = $198.4 Mil.
Gross Profit was 3.401 + 2.17 + 0.23 + 2.715 = $8.5 Mil.
Total Current Assets was $80.0 Mil.
Total Assets was $159.8 Mil.
Property, Plant and Equipment(Net PPE) was $73.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $16.7 Mil.
Selling, General & Admin. Expense(SGA) was $20.7 Mil.
Total Current Liabilities was $54.1 Mil.
Long-Term Debt was $3.2 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)|
|=||(24.736 / 244.44)||/||(20.851 / 198.404)|
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)|
|=||(5.093 / 198.404)||/||(8.631 / 244.44)|
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 - (76.666 + 66.336) / 150.859)||/||(1 - (80.035 + 72.972) / 159.818)|
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))|
|=||(16.71 / (16.71 + 72.972))||/||(13.087 / (13.087 + 66.336))|
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)|
|=||(22.446 / 244.44)||/||(20.678 / 198.404)|
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)|
|=||((3.335 + 47.28) / 150.859)||/||((3.203 + 54.054) / 159.818)|
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|
|=||(-5.327 - 0.517||-||1.932)||/||150.859|
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.
Broadwind Energy Inc has a M-score of -2.66 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
Broadwind Energy Inc Annual Data
Broadwind Energy Inc Quarterly Data