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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 -3.15 suggests that the company is not a manipulator.
During the past 8 years, the highest Beneish M-Score of Harbinger Group Inc was 69.31. The lowest was -26.67. And the median was -2.51.
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 * 0.1963||+||0.528 * 1.0092||+||0.404 * 1.1163||+||0.892 * 1.1359||+||0.115 * 1.1337|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0605||+||4.679 * -0.0195||-||0.327 * 1.0523|
|This Year (Jun14) TTM:||Last Year (Jun13) TTM:|
|Accounts Receivable was $665 Mil.|
Revenue was 1599.4 + 1341.2 + 1510 + 1500.8 = $5,951 Mil.
Gross Profit was 866.8 + 662 + 774.5 + 742.4 = $3,046 Mil.
Total Current Assets was $3,027 Mil.
Total Assets was $29,885 Mil.
Property, Plant and Equipment(Net PPE) was $925 Mil.
Depreciation, Depletion and Amortization(DDA) was $287 Mil.
Selling, General & Admin. Expense(SGA) was $2,119 Mil.
Total Current Liabilities was $900 Mil.
Long-Term Debt was $5,303 Mil.
Net Income was 98.3 + -75.5 + -26.8 + -190.2 = $-194 Mil.
Non Operating Income was 44 + -8.1 + -58.6 + -181.4 = $-204 Mil.
Cash Flow from Operations was 246.3 + 7.5 + -89.4 + 428.3 = $593 Mil.
|Accounts Receivable was $2,982 Mil.
Revenue was 1409.2 + 1411.1 + 1222.3 + 1196.853 = $5,239 Mil.
Gross Profit was 684.1 + 737.4 + 640.2 + 644.202 = $2,706 Mil.
Total Current Assets was $5,093 Mil.
Total Assets was $27,365 Mil.
Property, Plant and Equipment(Net PPE) was $999 Mil.
Depreciation, Depletion and Amortization(DDA) was $367 Mil.
Selling, General & Admin. Expense(SGA) was $1,759 Mil.
Total Current Liabilities was $843 Mil.
Long-Term Debt was $4,554 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)|
|=||(664.9 / 5951.4)||/||(2982.3 / 5239.453)|
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)|
|=||(662 / 5239.453)||/||(866.8 / 5951.4)|
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 - (3027.4 + 924.5) / 29885.2)||/||(1 - (5093.2 + 999.4) / 27365)|
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))|
|=||(366.565 / (366.565 + 999.4))||/||(286.7 / (286.7 + 924.5))|
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)|
|=||(2119.4 / 5951.4)||/||(1759.339 / 5239.453)|
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)|
|=||((5303.4 + 899.9) / 29885.2)||/||((4554.3 + 843.4) / 27365)|
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|
|=||(-194.2 - -204.1||-||592.7)||/||29885.2|
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 -3.15 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