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Group 1 Automotive Inc (NYSE:GPI)
Beneish M-Score
-2.11 (As of Today)

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.

Group 1 Automotive Inc has a M-score of -2.11 signals that the company is a manipulator.

GPI' s 10-Year Beneish M-Score Range
Min: -4.12   Max: 1.33
Current: -2.11

-4.12
1.33

During the past 13 years, the highest Beneish M-Score of Group 1 Automotive Inc was 1.33. The lowest was -4.12. And the median was -2.36.


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 Group 1 Automotive 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 * 0.8892+0.528 * 1.0312+0.404 * 0.964+0.892 * 1.1853+0.115 * 1.0337
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9567+4.679 * 0.0642-0.327 * 1.0181
=-2.11

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $340 Mil.
Revenue was 2260.863 + 2279.492 + 2340.147 + 2335.11 = $9,216 Mil.
Gross Profit was 338.122 + 321.321 + 329.462 + 341.274 = $1,330 Mil.
Total Current Assets was $1,936 Mil.
Total Assets was $3,826 Mil.
Property, Plant and Equipment(Net PPE) was $827 Mil.
Depreciation, Depletion and Amortization(DDA) was $37 Mil.
Selling, General & Admin. Expense(SGA) was $1,001 Mil.
Total Current Liabilities was $1,851 Mil.
Long-Term Debt was $665 Mil.
Net Income was 31.303 + 21.721 + 32.765 + 37.388 = $123 Mil.
Non Operating Income was -83.64 + 0 + -82.536 + -79.821 = $-246 Mil.
Cash Flow from Operations was 133.192 + -76.594 + 41.658 + 25.382 = $124 Mil.
Accounts Receivable was $323 Mil.
Revenue was 1963.832 + 1938.957 + 1976.572 + 1895.826 = $7,775 Mil.
Gross Profit was 300.489 + 280.253 + 291.231 + 285.344 = $1,157 Mil.
Total Current Assets was $1,739 Mil.
Total Assets was $3,426 Mil.
Property, Plant and Equipment(Net PPE) was $700 Mil.
Depreciation, Depletion and Amortization(DDA) was $33 Mil.
Selling, General & Admin. Expense(SGA) was $883 Mil.
Total Current Liabilities was $1,663 Mil.
Long-Term Debt was $550 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)
=(339.955 / 9215.612) / (322.541 / 7775.187)
=0.03688903 / 0.04148338
=0.8892

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)
=(321.321 / 7775.187) / (338.122 / 9215.612)
=0.14884748 / 0.14433974
=1.0312

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 - (1936.273 + 827.121) / 3825.937) / (1 - (1739.055 + 699.94) / 3425.96)
=0.27772099 / 0.28808422
=0.964

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
=9215.612 / 7775.187
=1.1853

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))
=(32.711 / (32.711 + 699.94)) / (37.338 / (37.338 + 827.121))
=0.04464745 / 0.04319233
=1.0337

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)
=(1000.981 / 9215.612) / (882.767 / 7775.187)
=0.10861796 / 0.11353643
=0.9567

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)
=((665.042 + 1850.919) / 3825.937) / ((549.739 + 1663.187) / 3425.96)
=0.65760649 / 0.64592873
=1.0181

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
=(123.177 - -245.997 - 123.638) / 3825.937
=0.0642

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.

Group 1 Automotive Inc has a M-score of -2.11 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.

Group 1 Automotive Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.00080.98410.96880.97410.70721.09381.04461.24480.98610.9567
GMI 1.04610.97980.98491.01760.96240.94471.07681.00761.05731.0312
AQI 1.02291.03411.08040.97550.90821.15320.90090.94010.90391.0584
SGI 1.20281.09841.01911.05090.88440.80041.21731.10361.22971.1929
DEPI 0.99190.81271.54811.53371.08430.92171.03681.12420.97951.0475
SGAI 0.9961.00430.9791.00081.07451.04930.91750.96050.93850.9651
LVGI 1.050.99171.05441.07970.99080.86680.98871.03851.0461.0261
TATA 0.0265-0.16560.01750.0327-0.1035-0.16660.05570.03180.1440.0163
M-score -2.16-3.20-2.34-2.27-3.39-3.29-1.96-2.03-1.63-2.23

Group 1 Automotive Inc Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 1.24481.14371.28061.1890.98611.11680.98620.9550.95670.8892
GMI 1.00760.98991.02411.04621.05731.05971.04251.03621.03121.0312
AQI 0.94010.95220.88320.83430.90391.0071.03361.07561.05840.964
SGI 1.10361.10611.16841.21581.22971.22731.21571.19751.19291.1853
DEPI 1.12421.06021.05181.02790.97950.98570.94940.95921.04751.0337
SGAI 0.96050.97520.96050.93670.93850.94830.95780.97060.96510.9567
LVGI 1.03851.03841.09641.08991.0461.03861.00210.99361.02611.0181
TATA 0.0140.06290.13180.160.1440.08950.07860.08190.05880.0642
M-score -2.11-1.98-1.51-1.42-1.63-1.72-1.90-1.91-2.03-2.11
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