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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.
Mitcham Industries, Inc. has a M-score of -3.07 suggests that the company is not a 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 -2.76.
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 * 1.375||+||0.528 * 1.0282||+||0.404 * 0.9818||+||0.892 * 0.8799||+||0.115 * 1.1699|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.1943||+||4.679 * -0.0812||-||0.327 * 2.3354|
* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.
|This Year (Jan14) TTM:||Last Year (Jan13) TTM:|
|Accounts Receivable was $30.52 Mil.|
Revenue was 23.647 + 20.275 + 20.895 + 27.291 = $92.11 Mil.
Gross Profit was 8.165 + 4.953 + 4.3 + 14.597 = $32.02 Mil.
Total Current Assets was $62.16 Mil.
Total Assets was $205.42 Mil.
Property, Plant and Equipment(Net PPE) was $129.57 Mil.
Depreciation, Depletion and Amortization(DDA) was $31.04 Mil.
Selling, General & Admin. Expense(SGA) was $23.67 Mil.
Total Current Liabilities was $12.44 Mil.
Long-Term Debt was $22.13 Mil.
Net Income was 1.782 + -2.628 + -0.693 + 6.307 = $4.77 Mil.
Non Operating Income was 0.009 + -0.517 + 1 + -0.261 = $0.23 Mil.
Cash Flow from Operations was 2.525 + 2.729 + 7.571 + 8.39 = $21.22 Mil.
|Accounts Receivable was $25.23 Mil.
Revenue was 28.401 + 18.573 + 23.08 + 34.631 = $104.69 Mil.
Gross Profit was 8.773 + 4.354 + 7.4 + 16.886 = $37.41 Mil.
Total Current Assets was $57.88 Mil.
Total Assets was $190.41 Mil.
Property, Plant and Equipment(Net PPE) was $119.61 Mil.
Depreciation, Depletion and Amortization(DDA) was $34.94 Mil.
Selling, General & Admin. Expense(SGA) was $22.52 Mil.
Total Current Liabilities was $9.48 Mil.
Long-Term Debt was $4.24 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)|
|=||(30.519 / 92.108)||/||(25.227 / 104.685)|
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)|
|=||(4.953 / 104.685)||/||(8.165 / 92.108)|
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 - (62.16 + 129.573) / 205.419)||/||(1 - (57.878 + 119.608) / 190.407)|
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))|
|=||(34.939 / (34.939 + 119.608))||/||(31.037 / (31.037 + 129.573))|
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)|
|=||(23.669 / 92.108)||/||(22.524 / 104.685)|
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)|
|=||((22.125 + 12.438) / 205.419)||/||((4.238 + 9.48) / 190.407)|
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|
|=||(4.768 - 0.231||-||21.215)||/||205.419|
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 -3.07 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