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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 -1.93. The lowest was -4.59. And the median was -3.17.
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 * 1.4085||+||0.528 * 1||+||0.404 * 1.3671||+||0.892 * 1.0547||+||0.115 * 0.9941|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9626||+||4.679 * -0.0678||-||0.327 * 0.9499|
* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.
|This Year (Dec14) TTM:||Last Year (Dec13) TTM:|
|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 $1,147.7 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 $917.5 Mil.
Long-Term Debt was $17.8 Mil.
Net Income was 12.981 + 11.365 + 12.926 + 13.62 = $50.9 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was 89.882 + 81.516 + -66.859 + 38.001 = $142.5 Mil.
|Accounts Receivable was $72.7 Mil.
Revenue was 131.9 + 127.558 + 139.293 + 132.05 = $530.8 Mil.
Gross Profit was 131.9 + 127.558 + 139.293 + 132.05 = $530.8 Mil.
Total Current Assets was $1,354.2 Mil.
Total Assets was $1,539.5 Mil.
Property, Plant and Equipment(Net PPE) was $66.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $53.6 Mil.
Selling, General & Admin. Expense(SGA) was $485.1 Mil.
Total Current Liabilities was $1,091.7 Mil.
Long-Term Debt was $30.3 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)|
|=||(107.935 / 559.814)||/||(72.66 / 530.801)|
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)|
|=||(134.773 / 530.801)||/||(148.966 / 559.814)|
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 - (1147.71 + 60.306) / 1350.849)||/||(1 - (1354.237 + 66.171) / 1539.472)|
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))|
|=||(53.606 / (53.606 + 66.171))||/||(49.384 / (49.384 + 60.306))|
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)|
|=||(492.505 / 559.814)||/||(485.106 / 530.801)|
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)|
|=||((17.781 + 917.472) / 1350.849)||/||((30.332 + 1091.708) / 1539.472)|
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|
|=||(50.892 - 0||-||142.54)||/||1350.849|
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 -2.20 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