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Mercadolibre Inc (NAS:MELI)
Beneish M-Score
-2.42 (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 -2.42 suggests that the company is not a manipulator.

MELI' s 10-Year Beneish M-Score Range
Min: -3.19   Max: -1.62
Current: -2.42

-3.19
-1.62

During the past 13 years, the highest Beneish M-Score of Mercadolibre Inc was -1.62. The lowest was -3.19. And the median was -2.46.


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 * 1.5312+0.528 * 1.0146+0.404 * 1.5566+0.892 * 1.1776+0.115 * 0.5308
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9977+4.679 * -0.126-0.327 * 1.5538
=-2.42

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
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 + 95.478 + 83.843 = $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.
Net Income was 34.145 + 33.765 + -25.594 + 30.264 = $72.6 Mil.
Non Operating Income was 5.299 + 5.22 + -15.965 + 3.093 = $-2.4 Mil.
Cash Flow from Operations was 58.354 + 50.532 + 60.281 + 27.627 = $196.8 Mil.
Accounts Receivable was $25.9 Mil.
Revenue was 134.63 + 123.055 + 112.183 + 102.726 = $472.6 Mil.
Gross Profit was 98.425 + 88.91 + 81.106 + 74.077 = $342.5 Mil.
Total Current Assets was $326.2 Mil.
Total Assets was $592.4 Mil.
Property, Plant and Equipment(Net PPE) was $131.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $11.9 Mil.
Selling, General & Admin. Expense(SGA) was $148.1 Mil.
Total Current Liabilities was $224.2 Mil.
Long-Term Debt was $2.5 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)
=(46.672 / 556.536) / (25.884 / 472.594)
=0.0838616 / 0.05477006
=1.5312

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)
=(104.533 / 472.594) / (113.705 / 556.536)
=0.72476163 / 0.71434552
=1.0146

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 - (532.75 + 91.545) / 966.848) / (1 - (326.164 + 131.372) / 592.363)
=0.35429871 / 0.22760875
=1.5566

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
=556.536 / 472.594
=1.1776

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))
=(11.878 / (11.878 + 131.372)) / (16.947 / (16.947 + 91.545))
=0.08291798 / 0.15620507
=0.5308

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)
=(173.992 / 556.536) / (148.092 / 472.594)
=0.31263386 / 0.31335988
=0.9977

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)
=((282.184 + 292.622) / 966.848) / ((2.49 + 224.166) / 592.363)
=0.59451537 / 0.38263025
=1.5538

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
=(72.58 - -2.353 - 196.794) / 966.848
=-0.126

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 -2.42 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

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 1.51280.39031.24071.52380.92491.03151.12060.93481.62531.5312
GMI 1.02631.02911.03241.02671.02481.01751.00681.00351.00541.0146
AQI 0.88830.98651.0470.79080.92370.6580.62510.831.00831.5566
SGI 1.29671.24981.22221.22091.23971.2651.2361.21391.19941.1776
DEPI 0.89750.99280.9341.62391.58042.31462.24720.79970.77850.5308
SGAI 0.93130.90410.90670.96020.97770.99860.98190.95840.93040.9977
LVGI 1.03761.05221.12561.13571.12841.05841.0571.52631.55741.5538
TATA -0.0409-0.0804-0.0924-0.0648-0.1255-0.0443-0.0341-0.0986-0.0784-0.126
M-score -1.98-3.19-2.49-2.14-2.91-2.42-2.34-3.07-2.28-2.42
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