Switch to:
MercadoLibre Inc (NAS:MELI)
Beneish M-Score
-2.77 (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 -2.77 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: -2.77

-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 -2.41.


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 * 0.7767+0.528 * 1.0747+0.404 * 1.1202+0.892 * 1.1223+0.115 * 0.9188
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0371+4.679 * -0.0571-0.327 * 1.0091
=-2.77

* 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 $47.1 Mil.
Revenue was 157.63 + 180.732 + 168.641 + 154.314 = $661.3 Mil.
Gross Profit was 102.182 + 117.57 + 111.828 + 104.003 = $435.6 Mil.
Total Current Assets was $605.0 Mil.
Total Assets was $1,083.5 Mil.
Property, Plant and Equipment(Net PPE) was $89.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $24.4 Mil.
Selling, General & Admin. Expense(SGA) was $210.4 Mil.
Total Current Liabilities was $386.3 Mil.
Long-Term Debt was $295.7 Mil.
Net Income was 30.247 + 38.965 + 45.64 + 19.463 = $134.3 Mil.
Non Operating Income was 5.147 + 17.772 + 2.57 + -0.648 = $24.8 Mil.
Cash Flow from Operations was -11.802 + 110.091 + 14.448 + 58.652 = $171.4 Mil.
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 + 95.477 = $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.



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)
=(47.118 / 661.317) / (54.054 / 589.257)
=0.07124874 / 0.09173247
=0.7767

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)
=(117.57 / 589.257) / (102.182 / 661.317)
=0.70785752 / 0.65865992
=1.0747

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 - (605.049 + 89.932) / 1083.469) / (1 - (588.175 + 75.945) / 976.783)
=0.35855941 / 0.32009464
=1.1202

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
=661.317 / 589.257
=1.1223

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))
=(18.509 / (18.509 + 75.945)) / (24.38 / (24.38 + 89.932))
=0.19595782 / 0.21327595
=0.9188

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)
=(210.367 / 661.317) / (180.741 / 589.257)
=0.31810312 / 0.30672695
=1.0371

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)
=((295.683 + 386.328) / 1083.469) / ((286.18 + 323.16) / 976.783)
=0.62946979 / 0.62382331
=1.0091

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
=(134.315 - 24.841 - 171.389) / 1083.469
=-0.0571

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 -2.77 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 9.98410.11861.11031.72991.57090.39031.03151.53120.5201
GMI 0.98850.97221.00891.00861.03461.02911.01751.01461.0659
AQI 0.46663.06010.89661.05460.64230.98650.6581.55661.0251
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 0.58291.22690.88920.99791.01651.05221.05841.55381.0381
TATA 0.0672-0.2187-0.0758-0.0438-0.0423-0.0804-0.0443-0.126-0.1263
M-score 6.63-3.02-2.48-1.62-1.94-3.19-2.42-2.42-3.36

MercadoLibre Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.03151.12060.93481.62531.53120.52580.40450.36350.52010.7767
GMI 1.01751.00681.00351.00541.01461.02561.04361.05411.06591.0747
AQI 0.6580.62510.831.00831.55661.45881.78861.11191.02511.1202
SGI 1.2651.2361.21391.19941.17761.21431.21151.19371.17121.1223
DEPI 2.31442.24710.79960.77850.53090.45840.7260.7580.70560.9188
SGAI 0.99860.98190.95840.93040.99770.99521.02131.0381.00581.0371
LVGI 1.05841.0571.52631.55741.55381.5891.04771.0251.03811.0091
TATA -0.0443-0.0341-0.0986-0.0784-0.126-0.1528-0.1155-0.063-0.1262-0.0571
M-score -2.42-2.34-3.07-2.28-2.42-3.50-3.09-3.16-3.36-2.77
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
FEEDBACK