Switch to:
Gevo Inc (NAS:GEVO)
Beneish M-Score
-0.81 (As of Today)

Warning Sign:

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.

Gevo Inc has a M-score of -0.81 signals that the company is a manipulator.

GEVO' s 10-Year Beneish M-Score Range
Min: -4.3   Max: 0.98
Current: -0.81

-4.3
0.98

During the past 6 years, the highest Beneish M-Score of Gevo Inc was 0.98. The lowest was -4.30. And the median was -2.03.


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 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
=-0.81

* 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 $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

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)
=(2.042 / 20.46) / (0.867 / 8.453)
=0.0998045 / 0.10256714
=0.9731

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)
=(-0.548 / 8.453) / (-1.619 / 20.46)
=-0.85448953 / -0.45439883
=1.8805

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 - (20.94 + 82.51) / 107.481) / (1 - (32.088 + 82.697) / 117.129)
=0.0375043 / 0.02001212
=1.8741

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
=20.46 / 8.453
=2.4204

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))
=0.03875347 / 0.04677734
=0.8285

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)
=0.93641251 / 3.277298
=0.2857

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)
=0.46155134 / 0.31706921
=1.4557

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
=(-47.395 - 8.446 - -47.934) / 107.481
=-0.0736

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.


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.

Gevo Inc Annual Data

Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.62895.7688
GMI -0.18650.2793
AQI 1.76040.9205
SGI 0.37780.3373
DEPI 3.34491.0549
SGAI 4.02981.7224
LVGI 1.20451.0428
TATA -0.0622-0.1527
M-score -4.310.06

Gevo Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.38450.41440.62891.67973.1675.53115.76883.75544.26910.9731
GMI 2.8893-0.4489-0.1865-0.0859-0.02070.16030.27930.30261.17161.8805
AQI 4.45632.97041.76041.53810.65031.09160.92051.04992.08351.8741
SGI 1.2470.64610.37780.20360.13930.2130.33730.42771.45112.4204
DEPI 2.5043.26563.34492.27221.3311.20541.05491.06391.09040.8285
SGAI 1.09972.84334.02985.0496.3362.88651.72241.4620.4440.2857
LVGI 2.351.68681.20450.95770.81260.84471.04281.04151.5491.4557
TATA -0.2029-0.1207-0.0621-0.1016-0.0932-0.1075-0.1527-0.1212-0.0858-0.0736
M-score -1.67-4.15-4.30-3.93-3.19-0.170.06-1.460.98-0.81
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