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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 -2.63.
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 * 0.7288||+||0.528 * 2.1131||+||0.404 * 1.1581||+||0.892 * 0.9658||+||0.115 * 0.9733|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.051||+||4.679 * 0.055||-||0.327 * 0.9014|
|This Year (Sep15) TTM:||Last Year (Sep14) TTM:|
|Accounts Receivable was $17.1 Mil.|
Revenue was 49.791 + 65.225 + 51.051 + 64.631 = $230.7 Mil.
Gross Profit was 2.831 + 7.234 + 0.739 + -1.712 = $9.1 Mil.
Total Current Assets was $64.4 Mil.
Total Assets was $123.5 Mil.
Property, Plant and Equipment(Net PPE) was $53.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $10.4 Mil.
Selling, General & Admin. Expense(SGA) was $21.6 Mil.
Total Current Liabilities was $39.6 Mil.
Long-Term Debt was $2.6 Mil.
Net Income was -7.613 + 1.615 + -5.015 + -5.172 = $-16.2 Mil.
Non Operating Income was -0.064 + -0.044 + 0.212 + 0.153 = $0.3 Mil.
Cash Flow from Operations was 8.403 + -3.093 + -20.038 + -8.509 = $-23.2 Mil.
|Accounts Receivable was $24.3 Mil.
Revenue was 55.295 + 68.381 + 58.8 + 56.397 = $238.9 Mil.
Gross Profit was 4.013 + 8.631 + 5.093 + 2.156 = $19.9 Mil.
Total Current Assets was $88.4 Mil.
Total Assets was $158.8 Mil.
Property, Plant and Equipment(Net PPE) was $64.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $12.1 Mil.
Selling, General & Admin. Expense(SGA) was $21.3 Mil.
Total Current Liabilities was $56.9 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)|
|=||(17.116 / 230.698)||/||(24.316 / 238.873)|
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)|
|=||(7.234 / 238.873)||/||(2.831 / 230.698)|
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 - (64.43 + 53.558) / 123.467)||/||(1 - (88.411 + 64.3) / 158.796)|
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))|
|=||(12.088 / (12.088 + 64.3))||/||(10.399 / (10.399 + 53.558))|
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)|
|=||(21.608 / 230.698)||/||(21.288 / 238.873)|
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)|
|=||((2.6 + 39.607) / 123.467)||/||((3.339 + 56.88) / 158.796)|
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|
|=||(-16.185 - 0.257||-||-23.237)||/||123.467|
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 -1.83 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
Broadwind Energy Inc Annual Data
Broadwind Energy Inc Quarterly Data