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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.
MicroFinancial, Inc. has a M-score of -4.65 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of MicroFinancial, Inc. was -4.13. The lowest was -518.78. And the median was -4.65.
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 MicroFinancial, 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||+||0.528 * 1||+||0.404 * 1.0105||+||0.892 * 1.054||+||0.115 * 0.9205|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0057||+||4.679 * -0.4763||-||0.327 * 0.9503|
* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.
|This Year (Dec13) TTM:||Last Year (Dec12) TTM:|
|Accounts Receivable was $0.00 Mil.|
Revenue was 15.806 + 15.743 + 15.674 + 15.295 = $62.52 Mil.
Gross Profit was 15.806 + 15.743 + 15.674 + 15.295 = $62.52 Mil.
Total Current Assets was $3.35 Mil.
Total Assets was $173.05 Mil.
Property, Plant and Equipment(Net PPE) was $1.33 Mil.
Depreciation, Depletion and Amortization(DDA) was $5.45 Mil.
Selling, General & Admin. Expense(SGA) was $18.51 Mil.
Total Current Liabilities was $84.57 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was 2.451 + 2.58 + 2.466 + 2.266 = $9.76 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.00 Mil.
Cash Flow from Operations was 22.971 + 24.298 + 23.532 + 21.381 = $92.18 Mil.
|Accounts Receivable was $0.00 Mil.
Revenue was 15.34 + 15.037 + 14.695 + 14.244 = $59.32 Mil.
Gross Profit was 15.34 + 15.037 + 14.695 + 14.244 = $59.32 Mil.
Total Current Assets was $4.77 Mil.
Total Assets was $169.63 Mil.
Property, Plant and Equipment(Net PPE) was $1.53 Mil.
Depreciation, Depletion and Amortization(DDA) was $4.36 Mil.
Selling, General & Admin. Expense(SGA) was $17.47 Mil.
Total Current Liabilities was $87.24 Mil.
Long-Term Debt was $0.00 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(0 / 62.518)||/||(0 / 59.316)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(15.743 / 59.316)||/||(15.806 / 62.518)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (3.353 + 1.333) / 173.052)||/||(1 - (4.77 + 1.534) / 169.629)|
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.
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))|
|=||(4.355 / (4.355 + 1.534))||/||(5.448 / (5.448 + 1.333))|
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)|
|=||(18.514 / 62.518)||/||(17.466 / 59.316)|
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)|
|=||((0 + 84.572) / 173.052)||/||((0 + 87.237) / 169.629)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(9.763 - 0||-||92.182)||/||173.052|
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.
MicroFinancial, Inc. has a M-score of -4.65 suggests that the company will not be a manipulator.
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
MicroFinancial, Inc. Annual Data
MicroFinancial, Inc. Quarterly Data