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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.
Investment Technology Group Inc has a M-score of -2.20 signals that the company is a manipulator.
During the past 13 years, the highest Beneish M-Score of Investment Technology Group Inc was -1.74. The lowest was -9.44. And the median was -2.70.
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 * 1.2671||+||0.528 * 1||+||0.404 * 0.7253||+||0.892 * 1.045||+||0.115 * 1.0112|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9359||+||4.679 * 0.0211||-||0.327 * 1.0275|
|This Year (Jun14) TTM:||Last Year (Jun13) TTM:|
|Accounts Receivable was $3,077.3 Mil.|
Revenue was 138.466 + 137.609 + 131.9 + 127.558 = $535.5 Mil.
Gross Profit was 138.466 + 137.609 + 131.9 + 127.558 = $535.5 Mil.
Total Current Assets was $3,446.9 Mil.
Total Assets was $3,630.0 Mil.
Property, Plant and Equipment(Net PPE) was $62.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $52.6 Mil.
Selling, General & Admin. Expense(SGA) was $476.4 Mil.
Total Current Liabilities was $3,185.0 Mil.
Long-Term Debt was $24.1 Mil.
Net Income was 12.926 + 13.62 + 9.662 + 7.715 = $43.9 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was -66.859 + 38.001 + -2.111 + -1.565 = $-32.5 Mil.
|Accounts Receivable was $2,324.1 Mil.
Revenue was 139.293 + 132.05 + 121.534 + 119.617 = $512.5 Mil.
Gross Profit was 139.293 + 132.05 + 121.534 + 119.617 = $512.5 Mil.
Total Current Assets was $2,678.9 Mil.
Total Assets was $2,874.5 Mil.
Property, Plant and Equipment(Net PPE) was $63.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $54.9 Mil.
Selling, General & Admin. Expense(SGA) was $487.2 Mil.
Total Current Liabilities was $2,439.4 Mil.
Long-Term Debt was $33.7 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)|
|=||(3077.335 / 535.533)||/||(2324.085 / 512.494)|
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)|
|=||(137.609 / 512.494)||/||(138.466 / 535.533)|
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 - (3446.86 + 62.306) / 3629.991)||/||(1 - (2678.886 + 63.728) / 2874.539)|
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))|
|=||(54.898 / (54.898 + 63.728))||/||(52.573 / (52.573 + 62.306))|
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)|
|=||(476.448 / 535.533)||/||(487.196 / 512.494)|
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)|
|=||((24.081 + 3184.952) / 3629.991)||/||((33.717 + 2439.401) / 2874.539)|
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|
|=||(43.923 - 0||-||-32.534)||/||3629.991|
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