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Group 1 Automotive Inc (NYSE:GPI)
Beneish M-Score
-2.38 (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 -2.38 suggests that the company is not a manipulator.

GPI' s 10-Year Beneish M-Score Range
Min: -3.23   Max: -1.56
Current: -2.38

-3.23
-1.56

During the past 13 years, the highest Beneish M-Score of Group 1 Automotive Inc was -1.56. The lowest was -3.23. 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 * 0.9885+0.528 * 0.9947+0.404 * 1.0103+0.892 * 1.1143+0.115 * 1.0093
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9756+4.679 * 0.006-0.327 * 1.0689
=-2.38

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $86 Mil.
Revenue was 2538.94 + 2626.448 + 2511.638 + 2260.863 = $9,938 Mil.
Gross Profit was 365.959 + 374.709 + 369.148 + 338.122 = $1,448 Mil.
Total Current Assets was $2,035 Mil.
Total Assets was $4,141 Mil.
Property, Plant and Equipment(Net PPE) was $950 Mil.
Depreciation, Depletion and Amortization(DDA) was $42 Mil.
Selling, General & Admin. Expense(SGA) was $1,062 Mil.
Total Current Liabilities was $1,922 Mil.
Long-Term Debt was $1,009 Mil.
Net Income was 18.677 + 26.162 + 16.862 + 31.303 = $93 Mil.
Non Operating Income was 0 + -22.79 + -23.614 + -83.64 = $-130 Mil.
Cash Flow from Operations was -73.548 + 140.903 + -2.259 + 133.192 = $198 Mil.
Accounts Receivable was $78 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.



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)
=(86.062 / 9937.889) / (78.131 / 8918.581)
=0.00865999 / 0.00876047
=0.9885

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)
=(374.709 / 8918.581) / (365.959 / 9937.889)
=0.14492732 / 0.14569875
=0.9947

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 - (2035.219 + 950.388) / 4141.492) / (1 - (1967.938 + 796.356) / 3819.478)
=0.27909869 / 0.27626393
=1.0103

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
=9937.889 / 8918.581
=1.1143

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))
=(35.826 / (35.826 + 796.356)) / (42.344 / (42.344 + 950.388))
=0.04305068 / 0.04265401
=1.0093

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)
=(1061.964 / 9937.889) / (976.856 / 8918.581)
=0.10686012 / 0.10953043
=0.9756

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)
=((1008.837 + 1922.199) / 4141.492) / ((663.689 + 1865.176) / 3819.478)
=0.70772466 / 0.66209702
=1.0689

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
=(93.004 - -130.044 - 198.288) / 4141.492
=0.006

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 -2.38 suggests that the company will not 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.96720.9251.02480.92081.15930.9940.57121.06441.04970.9885
GMI 0.97980.98491.01760.96240.94471.07681.00761.05731.03120.9947
AQI 1.03411.08040.97550.90821.15320.90090.94010.90391.05841.0103
SGI 1.09841.01911.05090.88440.80041.21731.10361.22971.19291.1143
DEPI 0.81271.54811.53371.08430.92171.03681.12420.97951.04751.0093
SGAI 1.00430.9791.00081.07451.04930.91750.96050.93850.96510.9756
LVGI 0.99171.05441.07970.99080.86680.98871.03851.0461.02611.0689
TATA -0.16560.01750.0327-0.1035-0.16660.05570.03180.1440.0163-0.0142
M-score -3.21-2.38-2.22-3.20-3.23-2.01-2.64-1.56-2.14-2.47

Group 1 Automotive Inc Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 1.12861.06440.58070.95311.05011.04970.97470.50442.36620.9885
GMI 1.04621.05731.05971.04251.03621.03121.03121.02151.00620.9947
AQI 0.83430.90391.0071.03361.07561.05840.9640.98311.02521.0103
SGI 1.21581.22971.22731.21571.19751.19291.18531.14341.12831.1143
DEPI 1.02790.97950.98570.94940.95921.04751.03371.02311.02191.0093
SGAI 0.93670.93850.94830.95780.97060.96510.95670.97180.96910.9756
LVGI 1.08991.0461.03861.00210.99361.02611.01811.07981.09971.0689
TATA 0.160.1440.08950.07860.08190.05880.06420.04940.00780.006
M-score -1.48-1.56-2.22-1.93-1.82-1.94-2.03-2.59-1.08-2.38
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