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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 -2.36 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Harbinger Group, Inc. was 537.50. The lowest was -6.49. And the median was -2.43.
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 * 0.8863||+||0.528 * 1.0422||+||0.404 * 0.9704||+||0.892 * 1.2852||+||0.115 * 1.9203|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9468||+||4.679 * -0.0177||-||0.327 * 1.2154|
* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.
|This Year (Dec13) TTM:||Last Year (Dec12) TTM:|
|Accounts Receivable was $646 Mil.|
Revenue was 1510 + 1498.6 + 1410.6 + 1411.9 = $5,831 Mil.
Gross Profit was 774.5 + 740.2 + 685.5 + 738.2 = $2,938 Mil.
Total Current Assets was $2,783 Mil.
Total Assets was $28,764 Mil.
Property, Plant and Equipment(Net PPE) was $1,010 Mil.
Depreciation, Depletion and Amortization(DDA) was $334 Mil.
Selling, General & Admin. Expense(SGA) was $1,966 Mil.
Total Current Liabilities was $892 Mil.
Long-Term Debt was $5,166 Mil.
Net Income was -26.8 + -190.2 + 103.6 + -33.3 = $-147 Mil.
Non Operating Income was -58.6 + -181.4 + 56.8 + -42.8 = $-226 Mil.
Cash Flow from Operations was -89.4 + 428.3 + 181.4 + 67.9 = $588 Mil.
|Accounts Receivable was $567 Mil.
Revenue was 1222.3 + 1196.8 + 1012.2 + 1105.7 = $4,537 Mil.
Gross Profit was 640.2 + 644.1 + 479.1 + 619.4 = $2,383 Mil.
Total Current Assets was $2,503 Mil.
Total Assets was $26,859 Mil.
Property, Plant and Equipment(Net PPE) was $328 Mil.
Depreciation, Depletion and Amortization(DDA) was $300 Mil.
Selling, General & Admin. Expense(SGA) was $1,616 Mil.
Total Current Liabilities was $736 Mil.
Long-Term Debt was $3,918 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)|
|=||(645.5 / 5831.1)||/||(566.7 / 4537)|
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)|
|=||(740.2 / 4537)||/||(774.5 / 5831.1)|
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 - (2783.1 + 1009.7) / 28764)||/||(1 - (2502.6 + 328) / 26858.8)|
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))|
|=||(299.8 / (299.8 + 328))||/||(334.2 / (334.2 + 1009.7))|
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)|
|=||(1965.9 / 5831.1)||/||(1615.5 / 4537)|
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)|
|=||((5165.9 + 891.8) / 28764)||/||((3917.8 + 736.2) / 26858.8)|
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|
|=||(-146.7 - -226||-||588.2)||/||28764|
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 -2.36 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