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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.
Harbinger Group Inc has a M-score of -2.51 suggests that the company is not a manipulator.
During the past 8 years, the highest Beneish M-Score of Harbinger Group Inc was 537.50. The lowest was -6.49. And the median was -2.44.
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 Harbinger Group 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 * 0.8754||+||0.528 * 1.0394||+||0.404 * 1.0175||+||0.892 * 1.1896||+||0.115 * 0.9108|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9555||+||4.679 * -0.0172||-||0.327 * 1.09|
|This Year (Mar14) TTM:||Last Year (Mar13) TTM:|
|Accounts Receivable was $3,045 Mil.|
Revenue was 1341.2 + 1510 + 1498.6 + 1410.6 = $5,760 Mil.
Gross Profit was 662 + 774.5 + 740.2 + 685.5 = $2,862 Mil.
Total Current Assets was $5,272 Mil.
Total Assets was $29,323 Mil.
Property, Plant and Equipment(Net PPE) was $931 Mil.
Depreciation, Depletion and Amortization(DDA) was $332 Mil.
Selling, General & Admin. Expense(SGA) was $1,938 Mil.
Total Current Liabilities was $822 Mil.
Long-Term Debt was $5,396 Mil.
Net Income was -75.5 + -26.8 + -190.2 + 103.6 = $-189 Mil.
Non Operating Income was -8.1 + -58.6 + -181.4 + 56.8 = $-191 Mil.
Cash Flow from Operations was 7.5 + -89.4 + 428.3 + 161.2 = $508 Mil.
|Accounts Receivable was $2,924 Mil.
Revenue was 1411.1 + 1222.3 + 1196.8 + 1012.2 = $4,842 Mil.
Gross Profit was 737.4 + 640.2 + 644.1 + 479.1 = $2,501 Mil.
Total Current Assets was $5,274 Mil.
Total Assets was $27,717 Mil.
Property, Plant and Equipment(Net PPE) was $966 Mil.
Depreciation, Depletion and Amortization(DDA) was $304 Mil.
Selling, General & Admin. Expense(SGA) was $1,705 Mil.
Total Current Liabilities was $796 Mil.
Long-Term Debt was $4,597 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)|
|=||(3044.7 / 5760.4)||/||(2923.8 / 4842.4)|
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)|
|=||(774.5 / 4842.4)||/||(662 / 5760.4)|
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 - (5272.4 + 930.6) / 29322.5)||/||(1 - (5273.7 + 965.6) / 27716.7)|
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))|
|=||(303.8 / (303.8 + 965.6))||/||(331.7 / (331.7 + 930.6))|
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)|
|=||(1938.1 / 5760.4)||/||(1705.2 / 4842.4)|
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)|
|=||((5396.3 + 821.5) / 29322.5)||/||((4596.7 + 795.5) / 27716.7)|
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|
|=||(-188.9 - -191.3||-||507.6)||/||29322.5|
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.
Harbinger Group Inc has a M-score of -2.51 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
Harbinger Group Inc Annual Data
Harbinger Group Inc Quarterly Data