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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.
Investment Technology Group Inc has a M-score of -2.70 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Investment Technology Group Inc was -1.74. The lowest was -10.09. And the median was -2.76.
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 * 0.6696||+||0.528 * 1||+||0.404 * 1.2263||+||0.892 * 1.0725||+||0.115 * 1.0055|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9349||+||4.679 * -0.0211||-||0.327 * 0.9596|
|This Year (Mar14) TTM:||Last Year (Mar13) TTM:|
|Accounts Receivable was $2,494.7 Mil.|
Revenue was 137.609 + 131.9 + 127.558 + 139.293 = $536.4 Mil.
Gross Profit was 137.609 + 131.9 + 127.558 + 139.293 = $536.4 Mil.
Total Current Assets was $2,844.2 Mil.
Total Assets was $3,030.6 Mil.
Property, Plant and Equipment(Net PPE) was $63.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $53.3 Mil.
Selling, General & Admin. Expense(SGA) was $483.2 Mil.
Total Current Liabilities was $2,587.3 Mil.
Long-Term Debt was $27.2 Mil.
Net Income was 13.62 + 9.662 + 7.715 + 5.086 = $36.1 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was 38.001 + -2.111 + -1.565 + 65.585 = $99.9 Mil.
|Accounts Receivable was $3,474.1 Mil.
Revenue was 132.05 + 121.534 + 119.617 + 126.91 = $500.1 Mil.
Gross Profit was 132.05 + 121.534 + 119.617 + 126.91 = $500.1 Mil.
Total Current Assets was $3,803.6 Mil.
Total Assets was $4,001.4 Mil.
Property, Plant and Equipment(Net PPE) was $65.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $55.5 Mil.
Selling, General & Admin. Expense(SGA) was $481.9 Mil.
Total Current Liabilities was $3,561.7 Mil.
Long-Term Debt was $35.6 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)|
|=||(2494.709 / 536.36)||/||(3474.083 / 500.111)|
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)|
|=||(131.9 / 500.111)||/||(137.609 / 536.36)|
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 - (2844.212 + 63.611) / 3030.56)||/||(1 - (3803.612 + 65.607) / 4001.363)|
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))|
|=||(55.523 / (55.523 + 65.607))||/||(53.296 / (53.296 + 63.611))|
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)|
|=||(483.163 / 536.36)||/||(481.858 / 500.111)|
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)|
|=||((27.212 + 2587.342) / 3030.56)||/||((35.574 + 3561.691) / 4001.363)|
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|
|=||(36.083 - 0||-||99.91)||/||3030.56|
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 -2.70 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
Investment Technology Group Inc Annual Data
Investment Technology Group Inc Quarterly Data