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Group 1 Automotive Inc (NYSE:GPI)
Beneish M-Score
-2.03 (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 -2.03 signals that the company is a manipulator.

GPI' s 10-Year Beneish M-Score Range
Min: -3.39   Max: 0.31
Current: -2.03

-3.39
0.31

During the past 13 years, the highest Beneish M-Score of Group 1 Automotive Inc was 0.31. The lowest was -3.39. And the median was -2.27.


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 * 0.9567+0.528 * 1.0312+0.404 * 1.0584+0.892 * 1.1929+0.115 * 1.0475
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9651+4.679 * 0.0588-0.327 * 1.0261
=-2.03

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $360 Mil.
Revenue was 2279.492 + 2340.147 + 2335.11 + 1963.832 = $8,919 Mil.
Gross Profit was 321.321 + 329.462 + 341.274 + 300.489 = $1,293 Mil.
Total Current Assets was $1,968 Mil.
Total Assets was $3,819 Mil.
Property, Plant and Equipment(Net PPE) was $796 Mil.
Depreciation, Depletion and Amortization(DDA) was $36 Mil.
Selling, General & Admin. Expense(SGA) was $977 Mil.
Total Current Liabilities was $1,865 Mil.
Long-Term Debt was $664 Mil.
Net Income was 21.721 + 32.765 + 37.388 + 22.118 = $114 Mil.
Non Operating Income was 0 + -82.536 + -79.821 + -0.789 = $-163 Mil.
Cash Flow from Operations was -76.594 + 41.658 + 25.382 + 61.926 = $52 Mil.
Accounts Receivable was $316 Mil.
Revenue was 1938.957 + 1976.572 + 1895.826 + 1664.745 = $7,476 Mil.
Gross Profit was 280.253 + 291.231 + 285.344 + 260.424 = $1,117 Mil.
Total Current Assets was $1,566 Mil.
Total Assets was $3,023 Mil.
Property, Plant and Equipment(Net PPE) was $668 Mil.
Depreciation, Depletion and Amortization(DDA) was $32 Mil.
Selling, General & Admin. Expense(SGA) was $848 Mil.
Total Current Liabilities was $1,396 Mil.
Long-Term Debt was $555 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)
=(360.214 / 8918.581) / (315.624 / 7476.1)
=0.04038916 / 0.04221773
=0.9567

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)
=(329.462 / 7476.1) / (321.321 / 8918.581)
=0.14944316 / 0.14492732
=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 - (1967.938 + 796.356) / 3819.478) / (1 - (1566.181 + 667.768) / 3023.015)
=0.27626393 / 0.26101955
=1.0584

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
=8918.581 / 7476.1
=1.1929

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))
=(31.534 / (31.534 + 667.768)) / (35.826 / (35.826 + 796.356))
=0.04509354 / 0.04305068
=1.0475

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)
=(976.856 / 8918.581) / (848.446 / 7476.1)
=0.10953043 / 0.11348778
=0.9651

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)
=((663.689 + 1865.176) / 3819.478) / ((555.016 + 1395.578) / 3023.015)
=0.66209702 / 0.64524787
=1.0261

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
=(113.992 - -163.146 - 52.372) / 3819.478
=0.0588

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 -2.03 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

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 0.95651.24481.14371.28061.1890.98611.11680.98620.9550.9567
GMI 1.02931.00760.98991.02411.04621.05731.05971.04251.03621.0312
AQI 1.04590.94010.95220.88320.83430.90391.0071.03361.07561.0584
SGI 1.12831.10361.10611.16841.21581.22971.22731.21571.19751.1929
DEPI 1.18351.12421.06021.05181.02790.97950.98570.94940.95921.0475
SGAI 0.93990.96050.97520.96050.93670.93850.94830.95780.97060.9651
LVGI 0.95341.03851.03841.09641.08991.0461.03861.00210.99361.0261
TATA -0.05230.0140.06290.13180.160.1440.08950.07860.08190.0588
M-score -2.57-2.11-1.98-1.51-1.42-1.63-1.72-1.90-1.91-2.03
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