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Beneish M-Score -0.81 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 6 years, the highest Beneish M-Score of Gevo Inc was 0.98. The lowest was -4.31. And the median was -2.03.
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 Gevo 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 * 0.9731||+||0.528 * 1.8805||+||0.404 * 1.8741||+||0.892 * 2.4204||+||0.115 * 0.8285|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.2857||+||4.679 * -0.0736||-||0.327 * 1.4557|
|This Year (Sep14) TTM:||Last Year (Sep13) TTM:|
|Accounts Receivable was $2.04 Mil.|
Revenue was 10.141 + 7.721 + 0.903 + 1.695 = $20.46 Mil.
Gross Profit was -1.619 + -0.548 + -3.777 + -3.353 = $-9.30 Mil.
Total Current Assets was $20.94 Mil.
Total Assets was $107.48 Mil.
Property, Plant and Equipment(Net PPE) was $82.51 Mil.
Depreciation, Depletion and Amortization(DDA) was $4.05 Mil.
Selling, General & Admin. Expense(SGA) was $19.16 Mil.
Total Current Liabilities was $10.56 Mil.
Long-Term Debt was $39.05 Mil.
Net Income was -0.938 + -17.156 + -11.972 + -17.329 = $-47.40 Mil.
Non Operating Income was 10.572 + -2.33 + 2.551 + -2.347 = $8.45 Mil.
Cash Flow from Operations was -7.386 + -12.234 + -12.986 + -15.328 = $-47.93 Mil.
|Accounts Receivable was $0.87 Mil.
Revenue was 1.127 + 1.859 + 3.543 + 1.924 = $8.45 Mil.
Gross Profit was -3.619 + -1.757 + -0.96 + -0.887 = $-7.22 Mil.
Total Current Assets was $32.09 Mil.
Total Assets was $117.13 Mil.
Property, Plant and Equipment(Net PPE) was $82.70 Mil.
Depreciation, Depletion and Amortization(DDA) was $3.33 Mil.
Selling, General & Admin. Expense(SGA) was $27.70 Mil.
Total Current Liabilities was $29.71 Mil.
Long-Term Debt was $7.43 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)|
|=||(2.042 / 20.46)||/||(0.867 / 8.453)|
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)|
|=||(-0.548 / 8.453)||/||(-1.619 / 20.46)|
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 - (20.94 + 82.51) / 107.481)||/||(1 - (32.088 + 82.697) / 117.129)|
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))|
|=||(3.334 / (3.334 + 82.697))||/||(4.049 / (4.049 + 82.51))|
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)|
|=||(19.159 / 20.46)||/||(27.703 / 8.453)|
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)|
|=||((39.045 + 10.563) / 107.481)||/||((7.432 + 29.706) / 117.129)|
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|
|=||(-47.395 - 8.446||-||-47.934)||/||107.481|
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.
Gevo Inc has a M-score of -0.81 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
Gevo Inc Annual Data
Gevo Inc Quarterly Data