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

Warning Sign:

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.

Gevo Inc has a M-score of 0.04 signals that the company is a manipulator.

GEVO' s 10-Year Beneish M-Score Range
Min: -4.31   Max: 6.15
Current: 0.04

-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 -1.46.


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 * 0.2496+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
=0.04

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

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

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)
=(2.319 / 34.465) / (3.085 / 11.446)
=0.06728565 / 0.26952647
=0.2496

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)
=(-3.335 / 11.446) / (-0.974 / 34.465)
=-0.98698235 / -0.21180908
=4.6598

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 - (28.32 + 77.899) / 110.047) / (1 - (14.171 + 83.704) / 101.972)
=0.03478514 / 0.0401777
=0.8658

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
=34.465 / 11.446
=3.0111

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))
=0.03796246 / 0.07763806
=0.489

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)
=0.48379515 / 1.9445221
=0.2488

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)
=0.46988105 / 0.56855804
=0.8264

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
=(-33.73 - 8.853 - -28.655) / 110.047
=-0.1266

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.


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

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 1.67973.1675.53115.76883.75544.26910.97310.50580.21670.2496
GMI -0.0859-0.02070.16030.27930.30261.17161.88054.551810.83714.6598
AQI 1.53810.65031.09160.92051.04992.08351.87412.15461.96540.8658
SGI 0.20360.13930.2130.33730.42771.45112.42043.4375.95673.0111
DEPI 2.27221.3311.20541.05491.06391.09040.82850.68930.58070.489
SGAI 5.0496.3362.88651.72241.4620.4440.28570.20890.12630.2488
LVGI 0.95770.81260.84471.04281.04151.5491.45571.35291.31090.8264
TATA -0.1017-0.0932-0.1075-0.1527-0.1212-0.0858-0.0736-0.1295-0.1406-0.1266
M-score -3.93-3.19-0.170.06-1.460.98-0.810.966.150.04
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