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Group 1 Automotive Inc (NYSE:GPI)
Beneish M-Score
-2.16 (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 -2.16 signals that the company is a manipulator.

GPI' s Beneish M-Score Range Over the Past 10 Years
Min: -3.99   Max: 1.3
Current: -2.16

-3.99
1.3

During the past 13 years, the highest Beneish M-Score of Group 1 Automotive Inc was 1.30. The lowest was -3.99. And the median was -2.21.


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 * 1.0326+0.528 * 0.9978+0.404 * 0.9401+0.892 * 1.0522+0.115 * 1.0381
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0178+4.679 * 0.0614-0.327 * 1.0533
=-2.16

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $87 Mil.
Revenue was 2782.449 + 2608.355 + 2672.602 + 2800.569 = $10,864 Mil.
Gross Profit was 410.119 + 389.101 + 380.133 + 398.382 = $1,578 Mil.
Total Current Assets was $2,202 Mil.
Total Assets was $4,501 Mil.
Property, Plant and Equipment(Net PPE) was $1,081 Mil.
Depreciation, Depletion and Amortization(DDA) was $49 Mil.
Selling, General & Admin. Expense(SGA) was $1,161 Mil.
Total Current Liabilities was $2,112 Mil.
Long-Term Debt was $1,251 Mil.
Net Income was 46.58 + 34.291 + -33.386 + 45.261 = $93 Mil.
Non Operating Income was -107.56 + -100.149 + -101.332 + -107.679 = $-417 Mil.
Cash Flow from Operations was 56.792 + 116.075 + -89.821 + 150.293 = $233 Mil.
Accounts Receivable was $80 Mil.
Revenue was 2726.48 + 2432.854 + 2538.94 + 2626.448 = $10,325 Mil.
Gross Profit was 391.573 + 363.884 + 365.959 + 374.709 = $1,496 Mil.
Total Current Assets was $2,099 Mil.
Total Assets was $4,303 Mil.
Property, Plant and Equipment(Net PPE) was $965 Mil.
Depreciation, Depletion and Amortization(DDA) was $45 Mil.
Selling, General & Admin. Expense(SGA) was $1,084 Mil.
Total Current Liabilities was $2,011 Mil.
Long-Term Debt was $1,042 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)
=(87.125 / 10863.975) / (80.188 / 10324.722)
=0.00801962 / 0.0077666
=1.0326

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)
=(1496.125 / 10324.722) / (1577.735 / 10863.975)
=0.14490705 / 0.14522631
=0.9978

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 - (2201.957 + 1081.232) / 4500.8) / (1 - (2099.365 + 965.363) / 4302.974)
=0.27053213 / 0.28776516
=0.9401

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
=10863.975 / 10324.722
=1.0522

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))
=(45.296 / (45.296 + 965.363)) / (48.786 / (48.786 + 1081.232))
=0.04481828 / 0.04317276
=1.0381

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)
=(1161.481 / 10863.975) / (1084.473 / 10324.722)
=0.10691124 / 0.10503653
=1.0178

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)
=((1250.94 + 2111.874) / 4500.8) / ((1041.852 + 2010.599) / 4302.974)
=0.74715917 / 0.7093817
=1.0533

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
=(92.746 - -416.72 - 233.339) / 4500.8
=0.0614

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 -2.16 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.9251.02480.92081.15930.55821.01711.06441.04970.98851.0123
GMI 0.98491.01760.96240.94471.07681.00761.05731.03120.99471.0099
AQI 1.08040.97550.90821.15320.90090.94010.90391.05841.01030.956
SGI 1.01911.05090.88440.80041.21731.10361.22971.19291.11431.0699
DEPI 1.54811.53371.08430.92171.03681.12420.97951.04751.00930.9763
SGAI 0.9791.00081.07451.04930.91750.96050.93850.96510.97560.9865
LVGI 1.05441.07970.99080.8521.00591.03851.0461.02611.06891.0379
TATA 0.01650.026-0.022-0.09730.13240.03180.1440.09790.07430.0819
M-score -2.38-2.26-2.82-2.90-2.06-2.23-1.56-1.76-2.06-2.05

Group 1 Automotive Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 0.97470.50442.36620.98851.44780.95460.24671.01230.74491.0326
GMI 1.03121.02151.00620.99470.99020.99781.00161.00991.01040.9978
AQI 0.9640.98311.02521.01031.02921.02650.99750.9560.93820.9401
SGI 1.18531.14341.12831.11431.0971.09931.08481.06991.06911.0522
DEPI 1.03371.02311.02191.00930.96820.99751.00380.97631.0331.0381
SGAI 0.95670.97180.96910.97560.97970.96550.9840.98650.99381.0178
LVGI 1.01811.07981.09971.06891.07421.02531.03261.03791.04921.0533
TATA 0.08480.09190.07490.07430.09710.09170.09130.08190.06790.0614
M-score -1.93-2.39-0.77-2.06-1.54-2.00-2.68-2.05-2.37-2.16
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