Switch to:
Genpact Ltd (NYSE:G)
Beneish M-Score
-2.51 (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.

Genpact Ltd has a M-score of -2.51 suggests that the company is not a manipulator.

G' s 10-Year Beneish M-Score Range
Min: -3.08   Max: -1.74
Current: -2.51

-3.08
-1.74

During the past 12 years, the highest Beneish M-Score of Genpact Ltd was -1.74. The lowest was -3.08. And the median was -2.51.


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 Genpact Ltd 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 * 1.0414+0.528 * 0.9834+0.404 * 1.0408+0.892 * 1.0745+0.115 * 1.0457
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.108+4.679 * -0.018-0.327 * 1.1225
=-2.51

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $534 Mil.
Revenue was 588.107 + 561.611 + 528.19 + 558.459 = $2,236 Mil.
Gross Profit was 233.632 + 221.486 + 203.901 + 212.617 = $872 Mil.
Total Current Assets was $1,206 Mil.
Total Assets was $2,739 Mil.
Property, Plant and Equipment(Net PPE) was $176 Mil.
Depreciation, Depletion and Amortization(DDA) was $77 Mil.
Selling, General & Admin. Expense(SGA) was $546 Mil.
Total Current Liabilities was $671 Mil.
Long-Term Debt was $653 Mil.
Net Income was 46.653 + 48.984 + 50.613 + 48.842 = $195 Mil.
Non Operating Income was -3.688 + -2.676 + -3.704 + -2.637 = $-13 Mil.
Cash Flow from Operations was 85.737 + 78.825 + 14.241 + 78.387 = $257 Mil.
Accounts Receivable was $477 Mil.
Revenue was 534.886 + 534.804 + 503.848 + 507.704 = $2,081 Mil.
Gross Profit was 205.597 + 202.09 + 192.122 + 197.878 = $798 Mil.
Total Current Assets was $1,217 Mil.
Total Assets was $2,644 Mil.
Property, Plant and Equipment(Net PPE) was $168 Mil.
Depreciation, Depletion and Amortization(DDA) was $79 Mil.
Selling, General & Admin. Expense(SGA) was $459 Mil.
Total Current Liabilities was $482 Mil.
Long-Term Debt was $657 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)
=(533.793 / 2236.367) / (476.997 / 2081.242)
=0.23868757 / 0.22918863
=1.0414

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)
=(221.486 / 2081.242) / (233.632 / 2236.367)
=0.38327451 / 0.38975535
=0.9834

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 - (1206.058 + 176.173) / 2739.384) / (1 - (1217.119 + 168.374) / 2644.135)
=0.49542269 / 0.47601276
=1.0408

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
=2236.367 / 2081.242
=1.0745

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))
=(78.509 / (78.509 + 168.374)) / (76.988 / (76.988 + 176.173))
=0.31800083 / 0.30410687
=1.0457

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)
=(546.194 / 2236.367) / (458.769 / 2081.242)
=0.24423272 / 0.2204304
=1.108

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)
=((653.227 + 671.493) / 2739.384) / ((657.4 + 481.717) / 2644.135)
=0.48358317 / 0.43080894
=1.1225

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
=(195.092 - -12.705 - 257.19) / 2739.384
=-0.018

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.

Genpact Ltd has a M-score of -2.51 suggests that the company will not 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.

Genpact Ltd Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.52531.01640.94071.02810.61251.81250.94510.9962
GMI 0.92881.10150.92191.0141.06911.00420.9511.0268
AQI 0.91180.79840.91250.88780.98681.28220.95140.9411
SGI 1.24631.3421.26521.07611.1241.27121.18841.1209
DEPI 1.22521.10970.88561.16711.08370.90191.06790.9267
SGAI 1.08741.08270.83151.01350.94570.97421.07840.9491
LVGI 1.1110.60091.36360.84230.69061.78751.47230.9202
TATA 0.0079-0.0823-0.0545-0.0153-0.0124-0.0218-0.0565-0.0378
M-score -1.84-2.44-2.73-2.43-2.63-1.74-2.83-2.54

Genpact Ltd Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.86260.95530.94510.89430.96690.90910.99621.01741.04421.0414
GMI 0.93070.92880.9510.97921.0051.0241.02681.01750.99830.9834
AQI 0.94220.96710.95140.97340.94720.95760.94110.93161.07821.0408
SGI 1.27611.22521.18841.15541.14771.1331.12091.09441.07151.0745
DEPI 0.89861.05411.06791.0511.01140.89380.92670.92791.0211.0457
SGAI 1.10571.10741.08891.02490.96750.9310.93990.96861.03451.108
LVGI 1.06131.54731.47231.57711.49740.92560.92020.91471.06561.1225
TATA -0.0416-0.0482-0.0734-0.0754-0.0363-0.0399-0.0219-0.014-0.0299-0.018
M-score -2.66-2.79-2.91-3.00-2.72-2.61-2.46-2.44-2.51-2.51
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