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Beneish M-Score 1.26 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 4.50. The lowest was -9.83. And the median was -2.72.
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 * 4.3074||+||0.528 * 1||+||0.404 * 1.6746||+||0.892 * 1.0251||+||0.115 * 1.0158|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9389||+||4.679 * 0.0653||-||0.327 * 0.7276|
* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.
|This Year (Sep16) TTM:||Last Year (Sep15) TTM:|
|Accounts Receivable was $283.0 Mil.|
Revenue was 104.185 + 120.61 + 124.668 + 224.173 = $573.6 Mil.
Gross Profit was 104.185 + 120.61 + 124.668 + 224.173 = $573.6 Mil.
Total Current Assets was $737.8 Mil.
Total Assets was $917.1 Mil.
Property, Plant and Equipment(Net PPE) was $52.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $43.3 Mil.
Selling, General & Admin. Expense(SGA) was $503.6 Mil.
Total Current Liabilities was $507.9 Mil.
Long-Term Debt was $7.9 Mil.
Net Income was -23.911 + -5.217 + -2.506 + 82.337 = $50.7 Mil.
Non Operating Income was 0.561 + 0.572 + 0.535 + 0.427 = $2.1 Mil.
Cash Flow from Operations was 80.08 + -122.157 + -32.609 + 63.379 = $-11.3 Mil.
|Accounts Receivable was $64.1 Mil.
Revenue was 120.409 + 140.494 + 149.727 + 148.966 = $559.6 Mil.
Gross Profit was 120.409 + 140.494 + 149.727 + 148.966 = $559.6 Mil.
Total Current Assets was $1,501.1 Mil.
Total Assets was $1,693.8 Mil.
Property, Plant and Equipment(Net PPE) was $53.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $44.8 Mil.
Selling, General & Admin. Expense(SGA) was $523.3 Mil.
Total Current Liabilities was $1,299.0 Mil.
Long-Term Debt was $10.4 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)|
|=||(283.012 / 573.636)||/||(64.095 / 559.596)|
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)|
|=||(559.596 / 559.596)||/||(573.636 / 573.636)|
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 - (737.786 + 52.663) / 917.102)||/||(1 - (1501.137 + 52.991) / 1693.817)|
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))|
|=||(44.819 / (44.819 + 52.991))||/||(43.277 / (43.277 + 52.663))|
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)|
|=||(503.635 / 573.636)||/||(523.286 / 559.596)|
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)|
|=||((7.918 + 507.934) / 917.102)||/||((10.414 + 1298.991) / 1693.817)|
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|
|=||(50.703 - 2.095||-||-11.307)||/||917.102|
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 1.26 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