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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.
Home Inns & Hotels Management Inc has a M-score of -3.04 suggests that the company is not a manipulator.
During the past 12 years, the highest Beneish M-Score of Home Inns & Hotels Management Inc was -1.32. The lowest was -9.96. And the median was -2.03.
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 Home Inns & Hotels Management 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 * 0.8337||+||0.528 * 0.7928||+||0.404 * 0.9378||+||0.892 * 1.0846||+||0.115 * 0.9151|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0752||+||4.679 * -0.0889||-||0.327 * 0.7101|
|This Year (Jun14) TTM:||Last Year (Jun13) TTM:|
|Accounts Receivable was $19.8 Mil.|
Revenue was 257.181994192 + 221.396626506 + 249.742687159 + 267.574963133 = $995.9 Mil.
Gross Profit was 51.626976444 + 20.5524497992 + 38.5602379772 + 55.1397673275 = $165.9 Mil.
Total Current Assets was $312.4 Mil.
Total Assets was $1,624.3 Mil.
Property, Plant and Equipment(Net PPE) was $662.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $118.1 Mil.
Selling, General & Admin. Expense(SGA) was $73.0 Mil.
Total Current Liabilities was $319.4 Mil.
Long-Term Debt was $116.1 Mil.
Net Income was 17.4517586318 + 12.0265060241 + 2.12411171707 + 17.6967065378 = $49.3 Mil.
Non Operating Income was -3.49628912552 + 11.2517269076 + -6.09915716411 + -5.01327216123 = $-3.4 Mil.
Cash Flow from Operations was 0 + 0 + 197.036688151 + 0 = $197.0 Mil.
|Accounts Receivable was $21.9 Mil.
Revenue was 244.97424193 + 212.459586162 + 221.075699132 + 239.726488903 = $918.2 Mil.
Gross Profit was 44.4819041409 + 15.2258325251 + 22.8405657345 + 38.7108414498 = $121.3 Mil.
Total Current Assets was $208.1 Mil.
Total Assets was $1,468.1 Mil.
Property, Plant and Equipment(Net PPE) was $634.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $101.9 Mil.
Selling, General & Admin. Expense(SGA) was $62.6 Mil.
Total Current Liabilities was $266.3 Mil.
Long-Term Debt was $288.1 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(19.8262342691 / 995.89627099)||/||(21.9254972286 / 918.236016128)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(20.5524497992 / 918.236016128)||/||(51.626976444 / 995.89627099)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (312.393352694 + 662.384640207) / 1624.28670539)||/||(1 - (208.109064232 + 633.992174764) / 1468.11493316)|
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.
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))|
|=||(101.8731919 / (101.8731919 + 633.992174764))||/||(118.07668154 / (118.07668154 + 662.384640207))|
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)|
|=||(73.0359888553 / 995.89627099)||/||(62.6286581496 / 918.236016128)|
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)|
|=||((116.146821555 + 319.435785737) / 1624.28670539)||/||((288.070916205 + 266.345940659) / 1468.11493316)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(49.2990829108 - -3.35699154323||-||197.036688151)||/||1624.28670539|
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.
Home Inns & Hotels Management Inc has a M-score of -3.04 suggests that the company will not be a manipulator.
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
Home Inns & Hotels Management Inc Annual Data
Home Inns & Hotels Management Inc Quarterly Data