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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 6 years, the highest Beneish M-Score of Boise Inc was 0.00. The lowest was 0.00. And the median was 0.00.
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 Boise 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 * 1.0648||+||0.528 * 1.0884||+||0.404 * 0.5563||+||0.892 * 0.9946||+||0.115 * 1.0031|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.1915||+||4.679 * -0.1036||-||0.327 * 1.0124|
* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.
|This Year (Jun13) TTM:||Last Year (Jun12) TTM:|
|Accounts Receivable was $254 Mil.|
Revenue was 621.664 + 607.018 + 627.492 + 645.185 = $2,501 Mil.
Gross Profit was 120.656 + 104.603 + 130.844 + 137.071 = $493 Mil.
Total Current Assets was $638 Mil.
Total Assets was $2,209 Mil.
Property, Plant and Equipment(Net PPE) was $1,380 Mil.
Depreciation, Depletion and Amortization(DDA) was $170 Mil.
Selling, General & Admin. Expense(SGA) was $229 Mil.
Total Current Liabilities was $319 Mil.
Long-Term Debt was $760 Mil.
Net Income was -2.208 + -1.225 + 13.547 + 3.603 = $14 Mil.
Non Operating Income was -0.415 + -0.341 + -0.376 + 0.296 = $-1 Mil.
Cash Flow from Operations was 41.733 + 39.863 + 69.756 + 92.147 = $243 Mil.
|Accounts Receivable was $240 Mil.
Revenue was 637.84 + 644.846 + 600.441 + 631.742 = $2,515 Mil.
Gross Profit was 126.031 + 137.601 + 132.972 + 143.071 = $540 Mil.
Total Current Assets was $656 Mil.
Total Assets was $2,252 Mil.
Property, Plant and Equipment(Net PPE) was $1,246 Mil.
Depreciation, Depletion and Amortization(DDA) was $154 Mil.
Selling, General & Admin. Expense(SGA) was $193 Mil.
Total Current Liabilities was $307 Mil.
Long-Term Debt was $780 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)|
|=||(254.348 / 2501.359)||/||(240.157 / 2514.869)|
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)|
|=||(104.603 / 2514.869)||/||(120.656 / 2501.359)|
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 - (638.209 + 1379.794) / 2209.144)||/||(1 - (656.193 + 1245.962) / 2252.472)|
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))|
|=||(153.717 / (153.717 + 1245.962))||/||(169.643 / (169.643 + 1379.794))|
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)|
|=||(229.11 / 2501.359)||/||(193.319 / 2514.869)|
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)|
|=||((760 + 319.275) / 2209.144)||/||((780 + 306.953) / 2252.472)|
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|
|=||(13.717 - -0.836||-||243.499)||/||2209.144|
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.
Boise Inc has a M-score of -3.08 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
Boise Inc Annual Data
Boise Inc Quarterly Data