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Beneish M-Score 0.04 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 7 years, the highest Beneish M-Score of Gevo Inc was 6.15. The lowest was -4.31. And the median was -1.46.
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 * 0.2496||+||0.528 * 4.6598||+||0.404 * 0.8658||+||0.892 * 3.0111||+||0.115 * 0.489|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.2488||+||4.679 * -0.1266||-||0.327 * 0.8264|
|This Year (Jun15) TTM:||Last Year (Jun14) TTM:|
|Accounts Receivable was $2.32 Mil.|
Revenue was 8.924 + 5.899 + 9.501 + 10.141 = $34.47 Mil.
Gross Profit was -0.974 + -3.335 + -1.372 + -1.619 = $-7.30 Mil.
Total Current Assets was $28.32 Mil.
Total Assets was $110.05 Mil.
Property, Plant and Equipment(Net PPE) was $77.90 Mil.
Depreciation, Depletion and Amortization(DDA) was $6.56 Mil.
Selling, General & Admin. Expense(SGA) was $16.67 Mil.
Total Current Liabilities was $15.04 Mil.
Long-Term Debt was $36.67 Mil.
Net Income was -14.37 + -7.343 + -11.079 + -0.938 = $-33.73 Mil.
Non Operating Income was -5.81 + 4.228 + -0.137 + 10.572 = $8.85 Mil.
Cash Flow from Operations was -5.396 + -9.489 + -6.384 + -7.386 = $-28.66 Mil.
|Accounts Receivable was $3.09 Mil.
Revenue was 7.721 + 0.903 + 1.695 + 1.127 = $11.45 Mil.
Gross Profit was -0.548 + -3.777 + -3.353 + -3.619 = $-11.30 Mil.
Total Current Assets was $14.17 Mil.
Total Assets was $101.97 Mil.
Property, Plant and Equipment(Net PPE) was $83.70 Mil.
Depreciation, Depletion and Amortization(DDA) was $3.30 Mil.
Selling, General & Admin. Expense(SGA) was $22.26 Mil.
Total Current Liabilities was $13.15 Mil.
Long-Term Debt was $44.83 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)|
|=||(2.319 / 34.465)||/||(3.085 / 11.446)|
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)|
|=||(-3.335 / 11.446)||/||(-0.974 / 34.465)|
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 - (28.32 + 77.899) / 110.047)||/||(1 - (14.171 + 83.704) / 101.972)|
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))|
|=||(3.303 / (3.303 + 83.704))||/||(6.557 / (6.557 + 77.899))|
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)|
|=||(16.674 / 34.465)||/||(22.257 / 11.446)|
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)|
|=||((36.672 + 15.037) / 110.047)||/||((44.827 + 13.15) / 101.972)|
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|
|=||(-33.73 - 8.853||-||-28.655)||/||110.047|
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 0.04 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