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Gevo Inc (NAS:GEVO)
Beneish M-Score
6.15 (As of Today)

Warning Sign:

Beneish M-Score 6.15 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 6.15 signals that the company is a manipulator.

GEVO' s 10-Year Beneish M-Score Range
Min: -4.31   Max: 6.15
Current: 6.15

-4.31
6.15

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 -1.57.


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 * 0.2167+0.528 * 10.8371+0.404 * 1.9654+0.892 * 5.9567+0.115 * 0.5807
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.1263+4.679 * -0.1406-0.327 * 1.3109
=6.15

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was $2.15 Mil.
Revenue was 5.899 + 9.501 + 10.141 + 7.721 = $33.26 Mil.
Gross Profit was -3.335 + -1.372 + -1.619 + -0.548 = $-6.87 Mil.
Total Current Assets was $11.55 Mil.
Total Assets was $95.02 Mil.
Property, Plant and Equipment(Net PPE) was $79.60 Mil.
Depreciation, Depletion and Amortization(DDA) was $5.72 Mil.
Selling, General & Admin. Expense(SGA) was $17.78 Mil.
Total Current Liabilities was $13.70 Mil.
Long-Term Debt was $35.57 Mil.
Net Income was -7.343 + -11.079 + -0.938 + -17.156 = $-36.52 Mil.
Non Operating Income was 4.228 + -0.137 + 10.572 + -2.33 = $12.33 Mil.
Cash Flow from Operations was -9.489 + -6.384 + -7.386 + -12.234 = $-35.49 Mil.
Accounts Receivable was $1.66 Mil.
Revenue was 0.903 + 1.695 + 1.127 + 1.859 = $5.58 Mil.
Gross Profit was -3.777 + -3.353 + -3.619 + -1.757 = $-12.51 Mil.
Total Current Assets was $14.94 Mil.
Total Assets was $100.26 Mil.
Property, Plant and Equipment(Net PPE) was $83.24 Mil.
Depreciation, Depletion and Amortization(DDA) was $3.37 Mil.
Selling, General & Admin. Expense(SGA) was $23.64 Mil.
Total Current Liabilities was $17.11 Mil.
Long-Term Debt was $22.54 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)
=(2.148 / 33.262) / (1.664 / 5.584)
=0.0645782 / 0.29799427
=0.2167

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)
=(-1.372 / 5.584) / (-3.335 / 33.262)
=-2.23961318 / -0.20666226
=10.8371

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 - (11.553 + 79.597) / 95.017) / (1 - (14.937 + 83.242) / 100.255)
=0.04069798 / 0.0207072
=1.9654

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
=33.262 / 5.584
=5.9567

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))
=(3.37 / (3.37 + 83.242)) / (5.716 / (5.716 + 79.597))
=0.03890916 / 0.06700034
=0.5807

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)
=(17.78 / 33.262) / (23.638 / 5.584)
=0.53454392 / 4.23316619
=0.1263

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)
=((35.567 + 13.702) / 95.017) / ((22.543 + 17.112) / 100.255)
=0.51852826 / 0.39554137
=1.3109

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
=(-36.516 - 12.333 - -35.493) / 95.017
=-0.1406

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 6.15 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

Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.62895.76880.5058
GMI -0.18650.27934.5518
AQI 1.76040.92052.1546
SGI 0.37780.33733.437
DEPI 3.34491.05490.6893
SGAI 4.02981.72240.2089
LVGI 1.20451.04281.3529
TATA -0.0622-0.1527-0.1295
M-score -4.310.060.96

Gevo Inc Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 0.62891.67973.1675.53115.76883.75544.26910.97310.50580.2167
GMI -0.1865-0.0859-0.02070.16030.27930.30261.17161.88054.551810.8371
AQI 1.76041.53810.65031.09160.92051.04992.08351.87412.15461.9654
SGI 0.37780.20360.13930.2130.33730.42771.45112.42043.4375.9567
DEPI 3.34492.27221.3311.20541.05491.06391.09040.82850.68930.5807
SGAI 4.02985.0496.3362.88651.72241.4620.4440.28570.20890.1263
LVGI 1.20450.95770.81260.84471.04281.04151.5491.45571.35291.3109
TATA -0.0622-0.1017-0.0932-0.1075-0.1527-0.1212-0.0858-0.0736-0.1295-0.1406
M-score -4.31-3.93-3.19-0.170.06-1.460.98-0.810.966.15
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