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Beneish M-Score 4.23 higher than -2.22, which implies that it might have manipulated its financial results.
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 4.23. The lowest was -9.52. 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 * 8.2922||+||0.528 * 1||+||0.404 * 0.8406||+||0.892 * 1.0661||+||0.115 * 1.0211|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9601||+||4.679 * -0.0009||-||0.327 * 0.9865|
* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.
|This Year (Mar16) TTM:||Last Year (Mar15) TTM:|
|Accounts Receivable was $974.4 Mil.|
Revenue was 124.668 + 224.173 + 120.409 + 140.494 = $609.7 Mil.
Gross Profit was 124.668 + 224.173 + 120.409 + 140.494 = $609.7 Mil.
Total Current Assets was $1,442.9 Mil.
Total Assets was $1,617.2 Mil.
Property, Plant and Equipment(Net PPE) was $54.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $43.8 Mil.
Selling, General & Admin. Expense(SGA) was $512.6 Mil.
Total Current Liabilities was $1,161.1 Mil.
Long-Term Debt was $11.1 Mil.
Net Income was -2.506 + 82.337 + 2.71 + -10.21 = $72.3 Mil.
Non Operating Income was 0.535 + 0.427 + 0.429 + 0.468 = $1.9 Mil.
Cash Flow from Operations was -32.609 + 63.379 + -7.532 + 48.752 = $72.0 Mil.
|Accounts Receivable was $110.2 Mil.
Revenue was 149.727 + 148.966 + 134.773 + 138.466 = $571.9 Mil.
Gross Profit was 149.727 + 148.966 + 134.773 + 138.466 = $571.9 Mil.
Total Current Assets was $1,337.6 Mil.
Total Assets was $1,529.5 Mil.
Property, Plant and Equipment(Net PPE) was $57.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $47.5 Mil.
Selling, General & Admin. Expense(SGA) was $500.8 Mil.
Total Current Liabilities was $1,109.2 Mil.
Long-Term Debt was $14.6 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)|
|=||(974.433 / 609.744)||/||(110.225 / 571.932)|
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)|
|=||(224.173 / 571.932)||/||(124.668 / 609.744)|
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 - (1442.851 + 54.511) / 1617.223)||/||(1 - (1337.628 + 56.967) / 1529.451)|
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))|
|=||(47.511 / (47.511 + 56.967))||/||(43.771 / (43.771 + 54.511))|
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)|
|=||(512.637 / 609.744)||/||(500.834 / 571.932)|
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)|
|=||((11.102 + 1161.132) / 1617.223)||/||((14.612 + 1109.15) / 1529.451)|
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|
|=||(72.331 - 1.859||-||71.99)||/||1617.223|
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 4.23 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