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MercadoLibre Inc (NAS:MELI)
Beneish M-Score
-3.36 (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 -3.36 suggests that the company is not a manipulator.

MELI' s Beneish M-Score Range Over the Past 10 Years
Min: -3.36   Max: 6.5
Current: -3.36

-3.36
6.5

During the past 13 years, the highest Beneish M-Score of MercadoLibre Inc was 6.50. The lowest was -3.36. 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 * 0.5201+0.528 * 1.0659+0.404 * 1.0251+0.892 * 1.1712+0.115 * 0.7056
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0058+4.679 * -0.1263-0.327 * 1.0381
=-3.36

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $28.4 Mil.
Revenue was 180.732 + 168.641 + 154.314 + 148.103 = $651.8 Mil.
Gross Profit was 117.57 + 111.828 + 104.003 + 103.395 = $436.8 Mil.
Total Current Assets was $557.5 Mil.
Total Assets was $1,003.6 Mil.
Property, Plant and Equipment(Net PPE) was $81.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $23.2 Mil.
Selling, General & Admin. Expense(SGA) was $205.0 Mil.
Total Current Liabilities was $325.0 Mil.
Long-Term Debt was $294.3 Mil.
Net Income was 38.964 + 45.64 + 19.463 + 1.721 = $105.8 Mil.
Non Operating Income was 17.772 + 2.57 + -0.648 + -8.57 = $11.1 Mil.
Cash Flow from Operations was 110.091 + 14.448 + 58.652 + 38.179 = $221.4 Mil.
Accounts Receivable was $46.7 Mil.
Revenue was 161.37 + 147.935 + 131.849 + 115.382 = $556.5 Mil.
Gross Profit was 113.705 + 104.533 + 95.477 + 83.842 = $397.6 Mil.
Total Current Assets was $532.8 Mil.
Total Assets was $966.8 Mil.
Property, Plant and Equipment(Net PPE) was $91.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $16.9 Mil.
Selling, General & Admin. Expense(SGA) was $174.0 Mil.
Total Current Liabilities was $292.6 Mil.
Long-Term Debt was $282.2 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)
=(28.428 / 651.79) / (46.672 / 556.536)
=0.04361527 / 0.0838616
=0.5201

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)
=(111.828 / 556.536) / (117.57 / 651.79)
=0.71434193 / 0.67014836
=1.0659

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 - (557.463 + 81.633) / 1003.606) / (1 - (532.75 + 91.545) / 966.848)
=0.3632003 / 0.35429871
=1.0251

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
=651.79 / 556.536
=1.1712

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))
=(16.947 / (16.947 + 91.545)) / (23.209 / (23.209 + 81.633))
=0.15620507 / 0.22137121
=0.7056

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)
=(204.951 / 651.79) / (173.989 / 556.536)
=0.3144433 / 0.31262847
=1.0058

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)
=((294.342 + 325.026) / 1003.606) / ((282.184 + 292.623) / 966.848)
=0.61714258 / 0.59451641
=1.0381

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
=(105.788 - 11.124 - 221.37) / 1003.606
=-0.1263

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 -3.36 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

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 0.92491.03151.12060.93481.62531.53120.52580.40450.36350.5201
GMI 1.02481.01751.00681.00351.00541.01461.02561.04361.05411.0659
AQI 0.92370.6580.62510.831.00831.55661.45881.78861.11191.0251
SGI 1.23971.2651.2361.21391.19941.17761.21431.21151.19371.1712
DEPI 1.58042.31442.24710.79960.77850.53090.45840.7260.7580.7056
SGAI 0.97770.99860.98190.95840.93040.99770.99521.02131.0381.0058
LVGI 1.12841.05841.0571.52631.55741.55381.5891.04771.0251.0381
TATA -0.1255-0.0443-0.0341-0.0986-0.0784-0.126-0.1528-0.1155-0.063-0.1263
M-score -2.91-2.42-2.34-3.07-2.28-2.42-3.50-3.09-3.16-3.36
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