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MercadoLibre Inc (NAS:MELI)
Beneish M-Score
-3.32 (As of Today)

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.

MercadoLibre Inc has a M-score of -3.32 suggests that the company is not a manipulator.

MELI' s Beneish M-Score Range Over the Past 10 Years
Min: -3.5   Max: 6.5
Current: -3.32

-3.5
6.5

During the past 13 years, the highest Beneish M-Score of MercadoLibre Inc was 6.50. The lowest was -3.50. And the median was -2.42.


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 MercadoLibre 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 * 0.4687+0.528 * 1.0704+0.404 * 0.8859+0.892 * 1.2157+0.115 * 1.1372
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9786+4.679 * -0.1166-0.327 * 1.0259
=-3.32

* 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 $31.1 Mil.
Revenue was 230.847 + 199.644 + 157.63 + 180.732 = $768.9 Mil.
Gross Profit was 145.648 + 126.298 + 102.182 + 117.57 = $491.7 Mil.
Total Current Assets was $759.1 Mil.
Total Assets was $1,256.1 Mil.
Property, Plant and Equipment(Net PPE) was $121.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $27.0 Mil.
Selling, General & Admin. Expense(SGA) was $233.2 Mil.
Total Current Liabilities was $496.3 Mil.
Long-Term Debt was $299.5 Mil.
Net Income was 38.912 + 15.858 + 30.247 + 38.965 = $124.0 Mil.
Non Operating Income was -4.823 + -5.387 + 5.147 + 17.772 = $12.7 Mil.
Cash Flow from Operations was 102.827 + 56.657 + -11.802 + 110.091 = $257.8 Mil.
Accounts Receivable was $54.6 Mil.
Revenue was 168.641 + 154.314 + 148.103 + 161.37 = $632.4 Mil.
Gross Profit was 111.828 + 104.003 + 103.395 + 113.705 = $432.9 Mil.
Total Current Assets was $625.2 Mil.
Total Assets was $1,068.8 Mil.
Property, Plant and Equipment(Net PPE) was $82.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $21.6 Mil.
Selling, General & Admin. Expense(SGA) was $196.0 Mil.
Total Current Liabilities was $367.3 Mil.
Long-Term Debt was $292.7 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)
=(31.086 / 768.853) / (54.551 / 632.428)
=0.04043166 / 0.08625646
=0.4687

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)
=(432.931 / 632.428) / (491.698 / 768.853)
=0.68455381 / 0.63952147
=1.0704

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 - (759.107 + 121.006) / 1256.057) / (1 - (625.214 + 82.51) / 1068.828)
=0.29930489 / 0.33785043
=0.8859

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
=768.853 / 632.428
=1.2157

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))
=(21.557 / (21.557 + 82.51)) / (26.951 / (26.951 + 121.006))
=0.2071454 / 0.18215427
=1.1372

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)
=(233.185 / 768.853) / (196.009 / 632.428)
=0.30328945 / 0.30993093
=0.9786

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)
=((299.472 + 496.313) / 1256.057) / ((292.726 + 367.311) / 1068.828)
=0.63355803 / 0.61753341
=1.0259

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
=(123.982 - 12.709 - 257.773) / 1256.057
=-0.1166

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.

MercadoLibre Inc has a M-score of -3.32 suggests that the company will not 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 local exchange's currency.

MercadoLibre Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 9.98410.11861.11031.72991.57090.39031.03151.53120.5201
GMI 0.97770.98291.00891.00861.03461.02911.01751.01461.0659
AQI 0.46663.06010.89661.05460.64230.98650.6581.55661.0597
SGI 1.63521.60961.26141.25381.37941.24981.2651.17761.1712
DEPI 1.13940.99480.9092.06911.00360.99292.31420.53090.7056
SGAI 0.79230.9840.84250.92520.94360.90410.99860.99771.0058
LVGI 0.58291.22690.88920.99791.01651.05221.05841.55381.0338
TATA 0.0672-0.2265-0.0758-0.0438-0.0423-0.0804-0.0443-0.126-0.1263
M-score 6.63-3.06-2.48-1.62-1.94-3.19-2.42-2.42-3.35

MercadoLibre Inc Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 0.93481.62531.53120.52580.40450.36350.52010.77670.75180.4687
GMI 1.00351.00541.01461.02561.04361.05411.06591.07471.07381.0704
AQI 0.831.00831.55661.45881.78861.11191.05971.12020.82990.8859
SGI 1.21391.19941.17761.21431.21151.19371.17121.12231.15521.2157
DEPI 0.79960.77850.53090.45840.7260.7580.70560.91881.01081.1372
SGAI 0.95840.93040.99770.99521.02131.0381.00581.03710.98620.9786
LVGI 1.52631.55741.55381.5891.04771.0251.03381.00911.01811.0259
TATA -0.0986-0.0784-0.126-0.1528-0.1155-0.063-0.1262-0.0571-0.0516-0.1166
M-score -3.07-2.28-2.42-3.50-3.09-3.16-3.35-2.77-2.84-3.32
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