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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 13 years, the highest Beneish M-Score of Broadwind Energy Inc was 16.14. The lowest was -5.73. And the median was -2.69.
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 * 0.9147||+||0.528 * 1.6456||+||0.404 * 0.8206||+||0.892 * 0.9424||+||0.115 * 1.0431|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9697||+||4.679 * -0.0046||-||0.327 * 0.9812|
|This Year (Jun15) TTM:||Last Year (Jun14) TTM:|
|Accounts Receivable was $21.3 Mil.|
Revenue was 65.225 + 51.051 + 53.798 + 60.289 = $230.4 Mil.
Gross Profit was 7.234 + 0.739 + -0.092 + 3.858 = $11.7 Mil.
Total Current Assets was $67.7 Mil.
Total Assets was $132.1 Mil.
Property, Plant and Equipment(Net PPE) was $58.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $11.0 Mil.
Selling, General & Admin. Expense(SGA) was $20.5 Mil.
Total Current Liabilities was $36.4 Mil.
Long-Term Debt was $7.0 Mil.
Net Income was 1.615 + -5.015 + -5.171 + -1.814 = $-10.4 Mil.
Non Operating Income was -0.044 + 0.212 + -0.006 + 0.148 = $0.3 Mil.
Cash Flow from Operations was -3.093 + -20.038 + -4.588 + 17.635 = $-10.1 Mil.
|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.
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)|
|=||(21.323 / 230.363)||/||(24.736 / 244.44)|
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)|
|=||(0.739 / 244.44)||/||(7.234 / 230.363)|
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 - (67.696 + 58.721) / 132.061)||/||(1 - (76.666 + 66.336) / 150.859)|
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))|
|=||(13.087 / (13.087 + 66.336))||/||(11.016 / (11.016 + 58.721))|
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)|
|=||(20.512 / 230.363)||/||(22.446 / 244.44)|
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)|
|=||((7.029 + 36.444) / 132.061)||/||((3.335 + 47.28) / 150.859)|
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|
|=||(-10.385 - 0.31||-||-10.084)||/||132.061|
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 -2.35 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