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Beneish M-Score 0.83 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 -2.74.
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 * 3.5379||+||0.528 * 1||+||0.404 * 1.3119||+||0.892 * 1.0277||+||0.115 * 1.0018|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9001||+||4.679 * 0.1575||-||0.327 * 0.7958|
|This Year (Jun16) TTM:||Last Year (Jun15) TTM:|
|Accounts Receivable was $383.8 Mil.|
Revenue was 120.61 + 124.668 + 224.173 + 120.409 = $589.9 Mil.
Gross Profit was 120.61 + 124.668 + 224.173 + 120.409 = $589.9 Mil.
Total Current Assets was $932.9 Mil.
Total Assets was $1,106.2 Mil.
Property, Plant and Equipment(Net PPE) was $52.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $43.6 Mil.
Selling, General & Admin. Expense(SGA) was $489.0 Mil.
Total Current Liabilities was $663.4 Mil.
Long-Term Debt was $9.5 Mil.
Net Income was -5.217 + -2.506 + 82.337 + 2.71 = $77.3 Mil.
Non Operating Income was 0.572 + 0.535 + 0.427 + 0.429 = $2.0 Mil.
Cash Flow from Operations was -122.157 + -32.609 + 63.379 + -7.532 = $-98.9 Mil.
|Accounts Receivable was $105.6 Mil.
Revenue was 140.494 + 149.727 + 148.966 + 134.773 = $574.0 Mil.
Gross Profit was 140.494 + 149.727 + 148.966 + 134.773 = $574.0 Mil.
Total Current Assets was $1,483.7 Mil.
Total Assets was $1,678.5 Mil.
Property, Plant and Equipment(Net PPE) was $55.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $45.8 Mil.
Selling, General & Admin. Expense(SGA) was $528.6 Mil.
Total Current Liabilities was $1,271.0 Mil.
Long-Term Debt was $12.0 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)|
|=||(383.779 / 589.86)||/||(105.551 / 573.96)|
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)|
|=||(573.96 / 573.96)||/||(589.86 / 589.86)|
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 - (932.867 + 52.723) / 1106.216)||/||(1 - (1483.744 + 55.236) / 1678.495)|
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))|
|=||(45.792 / (45.792 + 55.236))||/||(43.562 / (43.562 + 52.723))|
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)|
|=||(489.003 / 589.86)||/||(528.625 / 573.96)|
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)|
|=||((9.457 + 663.389) / 1106.216)||/||((11.962 + 1271.001) / 1678.495)|
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|
|=||(77.324 - 1.963||-||-98.919)||/||1106.216|
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 0.83 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