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Mercadolibre Inc (NAS:MELI)
Beneish M-Score
-3.50 (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 -3.50 suggests that the company is not a manipulator.

MELI' s 10-Year Beneish M-Score Range
Min: -3.5   Max: -1.06
Current: -3.5

-3.5
-1.06

During the past 13 years, the highest Beneish M-Score of Mercadolibre Inc was -1.06. The lowest was -3.50. And the median was -2.34.


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 * 0.5258+0.528 * 1.0256+0.404 * 1.4588+0.892 * 1.2143+0.115 * 0.4584
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9952+4.679 * -0.1528-0.327 * 1.589
=-3.50

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was $54.1 Mil.
Revenue was 148.103 + 161.37 + 147.935 + 131.849 = $589.3 Mil.
Gross Profit was 103.395 + 113.705 + 104.533 + 95.478 = $417.1 Mil.
Total Current Assets was $588.2 Mil.
Total Assets was $976.8 Mil.
Property, Plant and Equipment(Net PPE) was $75.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $18.5 Mil.
Selling, General & Admin. Expense(SGA) was $180.7 Mil.
Total Current Liabilities was $323.2 Mil.
Long-Term Debt was $286.2 Mil.
Net Income was 1.721 + 34.145 + 33.765 + -25.594 = $44.0 Mil.
Non Operating Income was -8.57 + 5.299 + 5.22 + -15.965 = $-14.0 Mil.
Cash Flow from Operations was 38.179 + 58.354 + 50.532 + 60.279 = $207.3 Mil.
Accounts Receivable was $84.7 Mil.
Revenue was 115.382 + 134.63 + 123.055 + 112.183 = $485.3 Mil.
Gross Profit was 83.842 + 98.425 + 88.91 + 81.106 = $352.3 Mil.
Total Current Assets was $337.2 Mil.
Total Assets was $597.9 Mil.
Property, Plant and Equipment(Net PPE) was $129.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $12.8 Mil.
Selling, General & Admin. Expense(SGA) was $149.6 Mil.
Total Current Liabilities was $226.8 Mil.
Long-Term Debt was $7.9 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)
=(54.054 / 589.257) / (84.654 / 485.25)
=0.09173247 / 0.1744544
=0.5258

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)
=(113.705 / 485.25) / (103.395 / 589.257)
=0.72598248 / 0.70785922
=1.0256

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 - (588.175 + 75.945) / 976.783) / (1 - (337.211 + 129.465) / 597.859)
=0.32009464 / 0.2194213
=1.4588

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
=589.257 / 485.25
=1.2143

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))
=(12.776 / (12.776 + 129.465)) / (18.509 / (18.509 + 75.945))
=0.08981939 / 0.19595782
=0.4584

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)
=(180.744 / 589.257) / (149.553 / 485.25)
=0.30673204 / 0.30819784
=0.9952

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)
=((286.18 + 323.16) / 976.783) / ((7.867 + 226.84) / 597.859)
=0.62382331 / 0.39257919
=1.589

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
=(44.037 - -14.016 - 207.344) / 976.783
=-0.1528

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 -3.50 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 own currency.

Mercadolibre Inc Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.4519.98410.11861.11031.72991.57090.39031.03151.5312
GMI 1.01930.97770.98291.00891.00861.03461.02911.01751.0146
AQI 0.81740.46663.06010.89661.05460.64230.98650.6581.5566
SGI 1.84281.63521.60961.26141.25381.37941.24981.2651.1776
DEPI 0.98481.13940.99480.9092.06911.00360.99292.31420.5309
SGAI 0.89460.79230.9840.84250.92520.94360.90410.99860.9977
LVGI 1.03320.58291.22690.88920.99791.01651.05221.05841.5538
TATA -0.05990.0672-0.2265-0.0758-0.0438-0.0423-0.0804-0.0443-0.126
M-score -2.576.63-3.06-2.48-1.62-1.94-3.19-2.42-2.42

Mercadolibre Inc Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 0.39031.24071.52380.92491.03151.12060.93481.62531.53120.5258
GMI 1.02911.03241.02671.02481.01751.00681.00351.00541.01461.0256
AQI 0.98651.0470.79080.92370.6580.62510.831.00831.55661.4588
SGI 1.24981.22221.22091.23971.2651.2361.21391.19941.17761.2143
DEPI 0.99280.9341.62391.58042.31462.24720.79970.77850.53080.4584
SGAI 0.90410.90670.96020.97770.99860.98190.95840.93040.99770.9952
LVGI 1.05221.12561.13571.12841.05841.0571.52631.55741.55381.589
TATA -0.0804-0.0924-0.0648-0.1255-0.0443-0.0341-0.0986-0.0784-0.126-0.1528
M-score -3.19-2.49-2.14-2.91-2.42-2.34-3.07-2.28-2.42-3.50
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