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

Warning Sign:

Beneish M-Score 4.23 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 4.23 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: 4.23

-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 -2.76.


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 * 8.2922+0.528 * 1+0.404 * 0.8406+0.892 * 1.0661+0.115 * 1.0211
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9601+4.679 * -0.0009-0.327 * 0.9865
=4.23

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $974.4 Mil.
Revenue was 124.668 + 224.173 + 120.409 + 140.494 = $609.7 Mil.
Gross Profit was 124.668 + 224.173 + 120.409 + 140.494 = $609.7 Mil.
Total Current Assets was $1,442.9 Mil.
Total Assets was $1,617.2 Mil.
Property, Plant and Equipment(Net PPE) was $54.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $43.8 Mil.
Selling, General & Admin. Expense(SGA) was $512.6 Mil.
Total Current Liabilities was $1,161.1 Mil.
Long-Term Debt was $11.1 Mil.
Net Income was -2.506 + 82.337 + 2.71 + -10.21 = $72.3 Mil.
Non Operating Income was 0.535 + 0.427 + 0.429 + 0.468 = $1.9 Mil.
Cash Flow from Operations was -32.609 + 63.379 + -7.532 + 48.752 = $72.0 Mil.
Accounts Receivable was $110.2 Mil.
Revenue was 149.727 + 148.966 + 134.773 + 138.466 = $571.9 Mil.
Gross Profit was 149.727 + 148.966 + 134.773 + 138.466 = $571.9 Mil.
Total Current Assets was $1,337.6 Mil.
Total Assets was $1,529.5 Mil.
Property, Plant and Equipment(Net PPE) was $57.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $47.5 Mil.
Selling, General & Admin. Expense(SGA) was $500.8 Mil.
Total Current Liabilities was $1,109.2 Mil.
Long-Term Debt was $14.6 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)
=(974.433 / 609.744) / (110.225 / 571.932)
=1.59810183 / 0.19272396
=8.2922

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)
=(571.932 / 571.932) / (609.744 / 609.744)
=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 - (1442.851 + 54.511) / 1617.223) / (1 - (1337.628 + 56.967) / 1529.451)
=0.07411532 / 0.08817281
=0.8406

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
=609.744 / 571.932
=1.0661

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))
=(47.511 / (47.511 + 56.967)) / (43.771 / (43.771 + 54.511))
=0.45474645 / 0.44536131
=1.0211

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)
=(512.637 / 609.744) / (500.834 / 571.932)
=0.84074136 / 0.87568802
=0.9601

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)
=((11.102 + 1161.132) / 1617.223) / ((14.612 + 1109.15) / 1529.451)
=0.72484376 / 0.73474861
=0.9865

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
=(72.331 - 1.859 - 71.99) / 1617.223
=-0.0009

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 4.23 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 1.1166.11741.13741.06771.02021.06470.94360.96260.9163
LVGI 6.04160.80150.92061.33781.05431.17570.8960.94921.0608
TATA 0.105-0.1617-0.0335-0.05540.00430.0042-0.0092-0.06780.024
M-score -3.33-4.45-2.61-1.91-2.76-2.59-3.14-2.21-2.93

Investment Technology Group Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 0.12631.70781.11871.40031.40850.04140.07370.04520.40188.2922
GMI 1111111111
AQI 1.19991.22630.72530.87231.3412.17712.49722.37240.69170.8406
SGI 1.05231.07251.0451.04291.05471.06631.07181.0311.1341.0661
DEPI 1.13231.00551.01120.95910.99411.00251.00971.00961.01611.0211
SGAI 0.94360.93490.93590.95410.96260.97211.03521.05230.91630.9601
LVGI 0.8960.95961.02751.02990.94920.85170.86460.86251.06080.9865
TATA -0.0105-0.0220.0203-0.0014-0.06960.002-0.0807-0.03240.024-0.0009
M-score -3.15-1.75-2.34-2.14-2.22-2.76-3.00-2.89-2.934.23
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