Switch to:
E*Trade Financial Corp (NAS:ETFC)
Beneish M-Score
0.00 (As of Today)

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.

E*Trade Financial Corp has a M-score of signals that the company is a manipulator.

ETFC' s 10-Year Beneish M-Score Range
Min: 0   Max: 0
Current: 0

During the past 13 years, the highest Beneish M-Score of E*Trade Financial Corp was 0.00. The lowest was 0.00. And the median was 0.00.


Definition

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 E*Trade Financial Corp 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 * +0.528 * +0.404 * +0.892 * +0.115 *
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * +4.679 * -0.327 *
=

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $7,340 Mil.
Revenue was 438 + 475 + 447.099 + 416.802 = $1,777 Mil.
Gross Profit was 0 + 0 + 0 + 0 = $0 Mil.
Total Current Assets was $0 Mil.
Total Assets was $45,748 Mil.
Property, Plant and Equipment(Net PPE) was $227 Mil.
Depreciation, Depletion and Amortization(DDA) was $339 Mil.
Selling, General & Admin. Expense(SGA) was $766 Mil.
Total Current Liabilities was $0 Mil.
Long-Term Debt was $3,061 Mil.
Net Income was 69 + 97 + 57.863 + 47.428 = $271 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 443 + -143 + 228.583 + 619.499 = $1,148 Mil.
Accounts Receivable was $5,970 Mil.
Revenue was 440 + 420 + 467.656 + 490.035 = $1,818 Mil.
Gross Profit was 0 + 0 + 0 + 0 = $0 Mil.
Total Current Assets was $0 Mil.
Total Assets was $45,007 Mil.
Property, Plant and Equipment(Net PPE) was $262 Mil.
Depreciation, Depletion and Amortization(DDA) was $432 Mil.
Selling, General & Admin. Expense(SGA) was $785 Mil.
Total Current Liabilities was $0 Mil.
Long-Term Debt was $3,394 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(7340 / 1776.901) / (5970.042 / 1817.691)
=4.13078725 / 3.28440973
=

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.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(0 / 1817.691) / (0 / 1776.901)
=0 / 0
=

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (0 + 227) / 45748) / (1 - (0 + 261.939) / 45006.525)
=0.99503803 / 0.99417998
=

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.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=1776.901 / 1817.691
=

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))
=(431.741 / (431.741 + 261.939)) / (338.973 / (338.973 + 227))
=0.62239217 / 0.5989208
=

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)
=(765.935 / 1776.901) / (784.696 / 1817.691)
=0.43105103 / 0.43169934
=

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)
=((3061 + 0) / 45748) / ((3394.485 + 0) / 45006.525)
=0.06691003 / 0.07542206
=

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(271.291 - 0 - 1148.082) / 45748
=-0.0192

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.

E*Trade Financial Corp has a M-score of signals that the company is likely to be a manipulator.


Related Terms

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


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

E*Trade Financial Corp Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI
GMI
AQI
SGI
DEPI
SGAI
LVGI
TATA
M-score

E*Trade Financial Corp Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI
GMI
AQI
SGI
DEPI
SGAI
LVGI
TATA
M-score
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK