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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 18.78. The lowest was -24.03. And the median was -2.89.
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 * 0.7661||+||0.528 * -0.6822||+||0.404 * 0.9859||+||0.892 * 0.7209||+||0.115 * 0.8469|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.2729||+||4.679 * -0.519||-||0.327 * 1.0097|
|This Year (Oct16) TTM:||Last Year (Oct15) TTM:|
|Accounts Receivable was $11.29 Mil.|
Revenue was 8.057 + 8.663 + 11.731 + 11.442 = $39.89 Mil.
Gross Profit was -2.137 + -2.242 + -0.366 + -1.021 = $-5.77 Mil.
Total Current Assets was $30.51 Mil.
Total Assets was $104.34 Mil.
Property, Plant and Equipment(Net PPE) was $54.19 Mil.
Depreciation, Depletion and Amortization(DDA) was $29.61 Mil.
Selling, General & Admin. Expense(SGA) was $20.53 Mil.
Total Current Liabilities was $13.66 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was -7.33 + -9.526 + -6.443 + -26.838 = $-50.14 Mil.
Non Operating Income was 0.287 + -0.612 + 0.451 + -0.94 = $-0.81 Mil.
Cash Flow from Operations was 0.603 + 1.334 + 1.75 + 1.148 = $4.84 Mil.
|Accounts Receivable was $20.45 Mil.
Revenue was 15.681 + 7.554 + 17.142 + 14.963 = $55.34 Mil.
Gross Profit was 1.723 + -2.609 + 4.576 + 1.767 = $5.46 Mil.
Total Current Assets was $45.55 Mil.
Total Assets was $153.43 Mil.
Property, Plant and Equipment(Net PPE) was $78.58 Mil.
Depreciation, Depletion and Amortization(DDA) was $33.55 Mil.
Selling, General & Admin. Expense(SGA) was $22.37 Mil.
Total Current Liabilities was $10.71 Mil.
Long-Term Debt was $9.19 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)|
|=||(11.292 / 39.893)||/||(20.448 / 55.34)|
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)|
|=||(5.457 / 55.34)||/||(-5.766 / 39.893)|
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 - (30.509 + 54.192) / 104.342)||/||(1 - (45.553 + 78.578) / 153.425)|
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))|
|=||(33.552 / (33.552 + 78.578))||/||(29.606 / (29.606 + 54.192))|
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)|
|=||(20.525 / 39.893)||/||(22.368 / 55.34)|
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 + 13.664) / 104.342)||/||((9.191 + 10.708) / 153.425)|
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|
|=||(-50.137 - -0.814||-||4.835)||/||104.342|
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 -6.33 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