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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.
During the past 13 years, the highest Beneish M-Score of Mitcham Industries Inc was 18.79. The lowest was -24.03. And the median was -2.91.
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 Mitcham Industries 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 * 1.1448||+||0.528 * 1.4227||+||0.404 * 1.9763||+||0.892 * 0.8234||+||0.115 * 0.7516|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.2138||+||4.679 * -0.1603||-||0.327 * 1.4904|
|This Year (Apr15) TTM:||Last Year (Apr14) TTM:|
|Accounts Receivable was $27.75 Mil.|
Revenue was 17.142 + 14.963 + 22.906 + 19.545 = $74.56 Mil.
Gross Profit was 4.576 + 1.767 + 7.007 + 3.237 = $16.59 Mil.
Total Current Assets was $56.86 Mil.
Total Assets was $178.32 Mil.
Property, Plant and Equipment(Net PPE) was $95.77 Mil.
Depreciation, Depletion and Amortization(DDA) was $36.21 Mil.
Selling, General & Admin. Expense(SGA) was $23.74 Mil.
Total Current Liabilities was $11.71 Mil.
Long-Term Debt was $17.36 Mil.
Net Income was -0.237 + -9.185 + -0.397 + -3.347 = $-13.17 Mil.
Non Operating Income was 0.786 + -2.628 + -0.387 + 0.058 = $-2.17 Mil.
Cash Flow from Operations was 6.438 + 8.662 + -2.607 + 5.092 = $17.59 Mil.
|Accounts Receivable was $29.44 Mil.
Revenue was 25.732 + 23.647 + 20.275 + 20.895 = $90.55 Mil.
Gross Profit was 11.243 + 8.165 + 4.953 + 4.3 = $28.66 Mil.
Total Current Assets was $56.53 Mil.
Total Assets was $195.05 Mil.
Property, Plant and Equipment(Net PPE) was $124.30 Mil.
Depreciation, Depletion and Amortization(DDA) was $32.29 Mil.
Selling, General & Admin. Expense(SGA) was $23.75 Mil.
Total Current Liabilities was $6.20 Mil.
Long-Term Debt was $15.13 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)|
|=||(27.746 / 74.556)||/||(29.435 / 90.549)|
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)|
|=||(1.767 / 90.549)||/||(4.576 / 74.556)|
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 - (56.858 + 95.769) / 178.317)||/||(1 - (56.534 + 124.296) / 195.049)|
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))|
|=||(32.293 / (32.293 + 124.296))||/||(36.211 / (36.211 + 95.769))|
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)|
|=||(23.735 / 74.556)||/||(23.749 / 90.549)|
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)|
|=||((17.356 + 11.707) / 178.317)||/||((15.127 + 6.203) / 195.049)|
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|
|=||(-13.166 - -2.171||-||17.585)||/||178.317|
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.
Mitcham Industries Inc has a M-score of -2.86 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
Mitcham Industries Inc Annual Data
Mitcham Industries Inc Quarterly Data