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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.
Carbonite Inc has a M-score of -3.37 suggests that the company is not a manipulator.
During the past 5 years, the highest Beneish M-Score of Carbonite Inc was -1.41. The lowest was -3.43. And the median was -1.75.
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 * 0.8727||+||0.528 * 0.9651||+||0.404 * 0.8984||+||0.892 * 1.2077||+||0.115 * 0.8788|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.8983||+||4.679 * -0.195||-||0.327 * 0.9631|
|This Year (Jun14) TTM:||Last Year (Jun13) TTM:|
|Accounts Receivable was $2.2 Mil.|
Revenue was 30.295 + 29.137 + 28.787 + 27.683 = $115.9 Mil.
Gross Profit was 20.574 + 19.877 + 20.098 + 18.784 = $79.3 Mil.
Total Current Assets was $78.2 Mil.
Total Assets was $115.0 Mil.
Property, Plant and Equipment(Net PPE) was $20.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $12.6 Mil.
Selling, General & Admin. Expense(SGA) was $61.5 Mil.
Total Current Liabilities was $85.9 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -2.536 + -0.982 + 0.318 + -1.187 = $-4.4 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was 3.276 + 7.324 + 5.082 + 2.353 = $18.0 Mil.
|Accounts Receivable was $2.1 Mil.
Revenue was 26.216 + 24.508 + 23.676 + 21.573 = $96.0 Mil.
Gross Profit was 17.761 + 15.67 + 15.6 + 14.368 = $63.4 Mil.
Total Current Assets was $63.5 Mil.
Total Assets was $103.8 Mil.
Property, Plant and Equipment(Net PPE) was $24.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $12.0 Mil.
Selling, General & Admin. Expense(SGA) was $56.7 Mil.
Total Current Liabilities was $80.5 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)|
|=||(2.248 / 115.902)||/||(2.133 / 95.973)|
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)|
|=||(19.877 / 95.973)||/||(20.574 / 115.902)|
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 - (78.235 + 20.63) / 114.959)||/||(1 - (63.47 + 24.126) / 103.766)|
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))|
|=||(12.028 / (12.028 + 24.126))||/||(12.567 / (12.567 + 20.63))|
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)|
|=||(61.482 / 115.902)||/||(56.673 / 95.973)|
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 + 85.861) / 114.959)||/||((0 + 80.471) / 103.766)|
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|
|=||(-4.387 - 0||-||18.035)||/||114.959|
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 -3.37 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
Carbonite Inc Annual Data
Carbonite Inc Quarterly Data