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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 10-Year Beneish M-Score Range
Min: -4.12   Max: 1.27
Current: -2.16

-4.12
1.27

During the past 13 years, the highest Beneish M-Score of Group 1 Automotive Inc was 1.27. The lowest was -4.12. And the median was -2.39.


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 * 0.9705+0.528 * 1.0215+0.404 * 0.9831+0.892 * 1.1434+0.115 * 1.0231
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9718+4.679 * 0.0494-0.327 * 1.0798
=-2.16

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $353 Mil.
Revenue was 2511.638 + 2260.863 + 2279.492 + 2340.147 = $9,392 Mil.
Gross Profit was 369.148 + 338.122 + 321.321 + 329.462 = $1,358 Mil.
Total Current Assets was $2,024 Mil.
Total Assets was $3,977 Mil.
Property, Plant and Equipment(Net PPE) was $838 Mil.
Depreciation, Depletion and Amortization(DDA) was $39 Mil.
Selling, General & Admin. Expense(SGA) was $1,022 Mil.
Total Current Liabilities was $1,813 Mil.
Long-Term Debt was $939 Mil.
Net Income was 16.862 + 31.303 + 21.721 + 32.765 = $103 Mil.
Non Operating Income was -23.614 + -83.64 + 0 + -82.536 = $-190 Mil.
Cash Flow from Operations was -2.259 + 133.192 + -76.594 + 41.658 = $96 Mil.
Accounts Receivable was $318 Mil.
Revenue was 2335.11 + 1963.832 + 1938.957 + 1976.572 = $8,214 Mil.
Gross Profit was 341.274 + 300.489 + 280.253 + 291.231 = $1,213 Mil.
Total Current Assets was $1,731 Mil.
Total Assets was $3,409 Mil.
Property, Plant and Equipment(Net PPE) was $706 Mil.
Depreciation, Depletion and Amortization(DDA) was $34 Mil.
Selling, General & Admin. Expense(SGA) was $920 Mil.
Total Current Liabilities was $1,643 Mil.
Long-Term Debt was $542 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)
=(353.026 / 9392.14) / (318.139 / 8214.471)
=0.03758739 / 0.03872909
=0.9705

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)
=(338.122 / 8214.471) / (369.148 / 9392.14)
=0.1476963 / 0.14459463
=1.0215

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 - (2024.203 + 837.821) / 3976.89) / (1 - (1730.8 + 706.293) / 3409.318)
=0.28033614 / 0.285167
=0.9831

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
=9392.14 / 8214.471
=1.1434

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))
=(33.853 / (33.853 + 706.293)) / (39.207 / (39.207 + 837.821))
=0.04573827 / 0.04470439
=1.0231

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)
=(1021.792 / 9392.14) / (919.599 / 8214.471)
=0.10879225 / 0.11194866
=0.9718

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)
=((938.575 + 1813.047) / 3976.89) / ((541.709 + 1642.842) / 3409.318)
=0.69190297 / 0.64075894
=1.0798

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
=(102.651 - -189.79 - 95.997) / 3976.89
=0.0494

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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.00110.98410.96880.9920.69451.09381.04461.24480.98610.9567
GMI 1.04610.97980.98491.01760.96240.94471.07681.00761.05731.0312
AQI 1.04461.03411.08040.97580.92851.12760.90090.94010.90391.0584
SGI 1.20281.09841.01911.05090.88440.80041.21731.10361.22971.1929
DEPI 0.99190.81271.54811.54061.07940.92171.03681.12420.97951.0475
SGAI 0.99471.00450.9791.00081.07451.04930.91750.96050.93850.9651
LVGI 1.04240.99171.05441.07470.99880.86381.00111.02571.0461.0261
TATA -0.0017-0.16560.01750.0327-0.1034-0.16660.0557-0.04720.1440.0163
M-score -2.28-3.20-2.34-2.25-3.40-3.30-1.97-2.39-1.63-2.23

Group 1 Automotive Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 1.14371.28061.1890.98611.11680.98620.9550.95670.88920.9705
GMI 0.98991.02411.04621.05731.05971.04251.03621.03121.03121.0215
AQI 0.95220.88320.83430.90391.0071.03361.07561.05840.9640.9831
SGI 1.10611.16841.21581.22971.22731.21571.19751.19291.18531.1434
DEPI 1.06021.05181.02790.97950.98570.94940.95921.04751.03371.0231
SGAI 0.97520.96050.93670.93850.94830.95780.97060.96510.95670.9718
LVGI 1.03841.09641.08991.0461.03861.00210.99361.02611.01811.0798
TATA -0.05230.04130.07170.12510.08950.07860.08190.05880.06420.0494
M-score -2.52-1.93-1.84-1.72-1.72-1.90-1.91-2.03-2.11-2.16
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