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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 -1.91. The lowest was -4.09. And the median was -2.93.
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 * 0.4018||+||0.528 * 1||+||0.404 * 0.6917||+||0.892 * 1.134||+||0.115 * 1.0161|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9163||+||4.679 * 0.024||-||0.327 * 1.0608|
|This Year (Dec15) TTM:||Last Year (Dec14) TTM:|
|Accounts Receivable was $49.2 Mil.|
Revenue was 224.173 + 120.409 + 140.494 + 149.727 = $634.8 Mil.
Gross Profit was 224.173 + 120.409 + 140.494 + 149.727 = $634.8 Mil.
Total Current Assets was $1,530.9 Mil.
Total Assets was $1,709.0 Mil.
Property, Plant and Equipment(Net PPE) was $55.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $44.2 Mil.
Selling, General & Admin. Expense(SGA) was $511.7 Mil.
Total Current Liabilities was $1,241.6 Mil.
Long-Term Debt was $12.6 Mil.
Net Income was 82.337 + 2.71 + -10.21 + 16.733 = $91.6 Mil.
Non Operating Income was 0.427 + 0.429 + 0.468 + 0.505 = $1.8 Mil.
Cash Flow from Operations was 63.379 + -7.532 + 48.752 + -55.853 = $48.7 Mil.
|Accounts Receivable was $107.9 Mil.
Revenue was 148.966 + 134.773 + 138.466 + 137.609 = $559.8 Mil.
Gross Profit was 148.966 + 134.773 + 138.466 + 137.609 = $559.8 Mil.
Total Current Assets was $1,150.4 Mil.
Total Assets was $1,350.8 Mil.
Property, Plant and Equipment(Net PPE) was $60.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $49.4 Mil.
Selling, General & Admin. Expense(SGA) was $492.5 Mil.
Total Current Liabilities was $916.8 Mil.
Long-Term Debt was $17.8 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)|
|=||(49.176 / 634.803)||/||(107.935 / 559.814)|
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)|
|=||(120.409 / 559.814)||/||(224.173 / 634.803)|
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 - (1530.916 + 55.496) / 1709.022)||/||(1 - (1150.439 + 60.306) / 1350.849)|
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))|
|=||(49.384 / (49.384 + 60.306))||/||(44.151 / (44.151 + 55.496))|
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)|
|=||(511.748 / 634.803)||/||(492.505 / 559.814)|
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)|
|=||((12.567 + 1241.634) / 1709.022)||/||((17.781 + 916.769) / 1350.849)|
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|
|=||(91.57 - 1.829||-||48.746)||/||1709.022|
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 -2.93 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