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Beneish M-Score -0.22 higher than -2.22, which implies that it might have manipulated its financial results.
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 7 years, the highest Beneish M-Score of Carbonite Inc was -0.22. The lowest was -3.46. And the median was -3.02.
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 Carbonite 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 * 3.8465||+||0.528 * 0.9818||+||0.404 * 1.1965||+||0.892 * 1.3148||+||0.115 * 0.9018|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0052||+||4.679 * -0.1429||-||0.327 * 1.0765|
|This Year (Jun16) TTM:||Last Year (Jun15) TTM:|
|Accounts Receivable was $17.2 Mil.|
Revenue was 53.435 + 48.115 + 35.065 + 34.553 = $171.2 Mil.
Gross Profit was 37.571 + 33.36 + 25.869 + 24.779 = $121.6 Mil.
Total Current Assets was $68.0 Mil.
Total Assets was $133.4 Mil.
Property, Plant and Equipment(Net PPE) was $24.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $15.2 Mil.
Selling, General & Admin. Expense(SGA) was $103.8 Mil.
Total Current Liabilities was $108.0 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 1.16 + -4.696 + -4.599 + -5.966 = $-14.1 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was 5.084 + -6.757 + 4.634 + 1.993 = $5.0 Mil.
|Accounts Receivable was $3.4 Mil.
Revenue was 33.972 + 33.026 + 31.914 + 31.274 = $130.2 Mil.
Gross Profit was 24.172 + 23.012 + 21.913 + 21.689 = $90.8 Mil.
Total Current Assets was $72.8 Mil.
Total Assets was $131.1 Mil.
Property, Plant and Equipment(Net PPE) was $25.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $13.0 Mil.
Selling, General & Admin. Expense(SGA) was $78.5 Mil.
Total Current Liabilities was $98.6 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)|
|=||(17.175 / 171.168)||/||(3.396 / 130.186)|
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)|
|=||(90.786 / 130.186)||/||(121.579 / 171.168)|
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 - (68.02 + 24.907) / 133.387)||/||(1 - (72.753 + 25.101) / 131.085)|
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))|
|=||(13.011 / (13.011 + 25.101))||/||(15.174 / (15.174 + 24.907))|
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)|
|=||(103.799 / 171.168)||/||(78.539 / 130.186)|
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 + 107.968) / 133.387)||/||((0 + 98.561) / 131.085)|
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|
|=||(-14.101 - 0||-||4.954)||/||133.387|
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.
Carbonite Inc has a M-score of -0.22 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
Carbonite Inc Annual Data
Carbonite Inc Quarterly Data