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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.
During the past 13 years, the highest Beneish M-Score of Investment Technology Group Inc was -1.85. The lowest was -9.75. And the median was -2.84.
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 Investment Technology 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 * 1.4003||+||0.528 * 1||+||0.404 * 0.8723||+||0.892 * 1.0429||+||0.115 * 0.9591|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9541||+||4.679 * -0.0007||-||0.327 * 1.0299|
|This Year (Sep14) TTM:||Last Year (Sep13) TTM:|
|Accounts Receivable was $1,376.0 Mil.|
Revenue was 134.773 + 138.466 + 137.609 + 131.9 = $542.7 Mil.
Gross Profit was 134.773 + 138.466 + 137.609 + 131.9 = $542.7 Mil.
Total Current Assets was $3,825.6 Mil.
Total Assets was $4,025.0 Mil.
Property, Plant and Equipment(Net PPE) was $59.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $51.2 Mil.
Selling, General & Admin. Expense(SGA) was $482.3 Mil.
Total Current Liabilities was $3,586.4 Mil.
Long-Term Debt was $20.9 Mil.
Net Income was 11.365 + 12.926 + 13.62 + 9.662 = $47.6 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was 81.516 + -66.859 + 38.001 + -2.111 = $50.5 Mil.
|Accounts Receivable was $942.3 Mil.
Revenue was 127.558 + 139.293 + 132.05 + 121.534 = $520.4 Mil.
Gross Profit was 127.558 + 139.293 + 132.05 + 121.534 = $520.4 Mil.
Total Current Assets was $2,963.6 Mil.
Total Assets was $3,157.3 Mil.
Property, Plant and Equipment(Net PPE) was $67.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $54.1 Mil.
Selling, General & Admin. Expense(SGA) was $484.7 Mil.
Total Current Liabilities was $2,714.2 Mil.
Long-Term Debt was $33.3 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)|
|=||(1376.047 / 542.748)||/||(942.25 / 520.435)|
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)|
|=||(138.466 / 520.435)||/||(134.773 / 542.748)|
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 - (3825.592 + 59.484) / 4024.994)||/||(1 - (2963.649 + 67.845) / 3157.31)|
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))|
|=||(54.119 / (54.119 + 67.845))||/||(51.214 / (51.214 + 59.484))|
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)|
|=||(482.302 / 542.748)||/||(484.713 / 520.435)|
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)|
|=||((20.937 + 3586.438) / 4024.994)||/||((33.319 + 2714.202) / 3157.31)|
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|
|=||(47.573 - 0||-||50.547)||/||4024.994|
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.
Investment Technology Group Inc has a M-score of -2.13 signals that the company is likely to 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
Investment Technology Group Inc Annual Data
Investment Technology Group Inc Quarterly Data