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Investment Technology Group Inc (NYSE:ITG)
Beneish M-Score
0.83 (As of Today)

Warning Sign:

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.

Investment Technology Group Inc has a M-score of 0.83 signals that the company is a manipulator.

ITG' s Beneish M-Score Range Over the Past 10 Years
Min: -9.52   Max: 4.23
Current: 0.83

-9.52
4.23

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.


Definition

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
=0.83

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

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

Measured as the ratio of days’ sales in receivables in year t to year t-1.

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)
=0.65062727 / 0.18389957
=3.5379

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.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(573.96 / 573.96) / (589.86 / 589.86)
=1 / 1
=1

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

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)
=0.1090438 / 0.0831191
=1.3119

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.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=589.86 / 573.96
=1.0277

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))
=0.45326048 / 0.45242769
=1.0018

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)
=0.82901536 / 0.92101366
=0.9001

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)
=0.60824107 / 0.76435319
=0.7958

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(77.324 - 1.963 - -98.919) / 1106.216
=0.1575

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.


Related Terms

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


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Investment Technology Group Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.48460.42511.19792.25390.77761.31240.12631.40850.4018
GMI 111111111
AQI 0.25411.27421.0230.7260.79170.34691.19991.3410.6917
SGI 1.21941.04380.82970.90161.00220.88181.05231.05471.134
DEPI 0.89380.83190.88910.96971.05961.14171.13230.99411.0161
SGAI 6.76321.00951.13741.06771.02021.06470.94360.96260.9163
LVGI 6.04160.80150.92061.33781.05431.17570.8960.94921.0608
TATA 0.1-0.1574-0.0171-0.0554-0.11430.0042-0.0109-0.06960.024
M-score -4.32-3.55-2.53-1.91-3.32-2.59-3.15-2.22-2.93

Investment Technology Group Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 1.70781.11871.40031.40850.04140.07370.04520.40188.29223.5379
GMI 1111111111
AQI 1.22630.72530.87231.3412.17712.49722.37240.69170.84061.3119
SGI 1.07251.0451.04291.05471.06631.07181.0311.1341.06611.0277
DEPI 1.00551.01120.95910.99411.00251.00971.00961.01611.02111.0018
SGAI 0.93490.93590.95410.96260.97211.03521.05230.91630.96010.9001
LVGI 0.95961.02751.02990.94920.85170.86460.86251.06080.98650.7958
TATA -0.0220.0203-0.0014-0.06960.002-0.0807-0.03240.024-0.00090.1575
M-score -1.75-2.34-2.14-2.22-2.76-3.00-2.89-2.934.230.83
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