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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 8 years, the highest Beneish M-Score of ExamWorks Group Inc was -1.64. The lowest was -2.77. And the median was -2.43.
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 ExamWorks Group 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 * 1.138||+||0.528 * 1.036||+||0.404 * 0.9993||+||0.892 * 1.0637||+||0.115 * 1.0975|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9348||+||4.679 * -0.0307||-||0.327 * 1.0946|
|This Year (Mar16) TTM:||Last Year (Mar15) TTM:|
|Accounts Receivable was $249.1 Mil.|
Revenue was 226.503 + 208.48 + 206.033 + 208.738 = $849.8 Mil.
Gross Profit was 77.377 + 71.033 + 71.587 + 72.313 = $292.3 Mil.
Total Current Assets was $286.1 Mil.
Total Assets was $1,113.8 Mil.
Property, Plant and Equipment(Net PPE) was $22.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $57.5 Mil.
Selling, General & Admin. Expense(SGA) was $171.8 Mil.
Total Current Liabilities was $148.0 Mil.
Long-Term Debt was $575.9 Mil.
Net Income was 3.26 + 4.275 + 7.155 + -7.863 = $6.8 Mil.
Non Operating Income was 0 + 0 + 0 + -18.619 = $-18.6 Mil.
Cash Flow from Operations was 15.766 + 8.402 + 27.577 + 7.887 = $59.6 Mil.
|Accounts Receivable was $205.8 Mil.
Revenue was 196.316 + 202.064 + 204.078 + 196.445 = $798.9 Mil.
Gross Profit was 68.14 + 71.509 + 73.481 + 71.594 = $284.7 Mil.
Total Current Assets was $244.7 Mil.
Total Assets was $943.8 Mil.
Property, Plant and Equipment(Net PPE) was $16.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $60.8 Mil.
Selling, General & Admin. Expense(SGA) was $172.8 Mil.
Total Current Liabilities was $132.0 Mil.
Long-Term Debt was $428.4 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)|
|=||(249.062 / 849.754)||/||(205.759 / 798.903)|
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)|
|=||(71.033 / 798.903)||/||(77.377 / 849.754)|
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 - (286.053 + 22.264) / 1113.76)||/||(1 - (244.739 + 16.055) / 943.762)|
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))|
|=||(60.786 / (60.786 + 16.055))||/||(57.479 / (57.479 + 22.264))|
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)|
|=||(171.837 / 849.754)||/||(172.821 / 798.903)|
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)|
|=||((575.937 + 147.959) / 1113.76)||/||((428.447 + 131.963) / 943.762)|
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|
|=||(6.827 - -18.619||-||59.632)||/||1113.76|
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.
ExamWorks Group Inc has a M-score of -2.43 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
ExamWorks Group Inc Annual Data
ExamWorks Group Inc Quarterly Data