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Group 1 Automotive Inc (NYSE:GPI)
Beneish M-Score
-2.21 (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 -2.21 signals that the company is a manipulator.

GPI' s 10-Year Beneish M-Score Range
Min: -4.06   Max: 1.33
Current: -2.21

-4.06
1.33

During the past 13 years, the highest Beneish M-Score of Group 1 Automotive Inc was 1.33. The lowest was -4.06. And the median was -2.38.


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 * 0.9546+0.528 * 0.9978+0.404 * 1.0265+0.892 * 1.0993+0.115 * 0.9975
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9655+4.679 * 0.0469-0.327 * 1.0253
=-2.21

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
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.
Net Income was 46.31 + 35.815 + 18.677 + 26.162 = $127 Mil.
Non Operating Income was -105.219 + -94.556 + 0 + -22.79 = $-223 Mil.
Cash Flow from Operations was 22.408 + 58.167 + -73.548 + 140.903 = $148 Mil.
Accounts Receivable was $76 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.



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)
=(80.188 / 10324.722) / (76.418 / 9392.14)
=0.0077666 / 0.00813638
=0.9546

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)
=(363.884 / 9392.14) / (391.573 / 10324.722)
=0.14459463 / 0.14490705
=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 - (2099.365 + 965.363) / 4302.974) / (1 - (2024.203 + 837.821) / 3976.89)
=0.28776516 / 0.28033614
=1.0265

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
=10324.722 / 9392.14
=1.0993

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))
=(39.207 / (39.207 + 837.821)) / (45.296 / (45.296 + 965.363))
=0.04470439 / 0.04481828
=0.9975

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)
=(1084.473 / 10324.722) / (1021.792 / 9392.14)
=0.10503653 / 0.10879225
=0.9655

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)
=((1041.852 + 2010.599) / 4302.974) / ((938.575 + 1813.047) / 3976.89)
=0.7093817 / 0.69190297
=1.0253

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
=(126.964 - -222.565 - 147.93) / 4302.974
=0.0469

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 -2.21 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.96720.9251.02480.92081.15930.55821.01711.06441.04970.9885
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 0.99171.05441.07970.99080.8521.00591.03851.0461.02611.0689
TATA -0.16560.01750.0327-0.1035-0.16660.05570.03180.1440.0163-0.0142
M-score -3.21-2.38-2.22-3.20-3.23-2.41-2.23-1.56-2.14-2.47

Group 1 Automotive Inc Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 0.58070.95311.05011.04970.97470.50442.36620.98851.44780.9546
GMI 1.05971.04251.03621.03121.03121.02151.00620.99470.99020.9978
AQI 1.0071.03361.07561.05840.9640.98311.02521.01031.02921.0265
SGI 1.22731.21571.19751.19291.18531.14341.12831.11431.0971.0993
DEPI 0.98570.94940.95921.04751.03371.02311.02191.00930.96820.9975
SGAI 0.94830.95780.97060.96510.95670.97180.96910.97560.97970.9655
LVGI 1.03861.00210.99361.02611.01811.07981.09971.06891.07421.0253
TATA 0.08950.07860.08190.05880.06420.04940.00780.0060.02810.0469
M-score -2.22-1.93-1.82-1.94-2.03-2.59-1.08-2.38-1.87-2.21
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