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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.
MarketAxess Holdings, Inc. has a M-score of -2.38 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of MarketAxess Holdings, Inc. was -1.64. The lowest was -3.31. 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 MarketAxess Holdings, 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 * 0.882||+||0.528 * 1||+||0.404 * 1.3239||+||0.892 * 1.2475||+||0.115 * 1.0999|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9772||+||4.679 * -0.0423||-||0.327 * 0.8837|
|This Year (Dec13) TTM:||Last Year (Dec12) TTM:|
|Accounts Receivable was $34.2 Mil.|
Revenue was 60.442 + 61.133 + 65.559 + 55.557 = $242.7 Mil.
Gross Profit was 60.442 + 61.133 + 65.559 + 55.557 = $242.7 Mil.
Total Current Assets was $234.6 Mil.
Total Assets was $351.6 Mil.
Property, Plant and Equipment(Net PPE) was $32.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $13.1 Mil.
Selling, General & Admin. Expense(SGA) was $121.2 Mil.
Total Current Liabilities was $41.2 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 23.133 + 18.213 + 19.343 + 15.326 = $76.0 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was 23.55 + 37.08 + 19.97 + 10.279 = $90.9 Mil.
|Accounts Receivable was $31.0 Mil.
Revenue was 48.578 + 46.402 + 48.825 + 50.735 = $194.5 Mil.
Gross Profit was 48.578 + 46.402 + 48.825 + 50.735 = $194.5 Mil.
Total Current Assets was $211.2 Mil.
Total Assets was $279.8 Mil.
Property, Plant and Equipment(Net PPE) was $18.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $8.2 Mil.
Selling, General & Admin. Expense(SGA) was $99.4 Mil.
Total Current Liabilities was $37.1 Mil.
Long-Term Debt was $0.0 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)|
|=||(34.158 / 242.691)||/||(31.044 / 194.54)|
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)|
|=||(61.133 / 194.54)||/||(60.442 / 242.691)|
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 - (234.591 + 32.703) / 351.578)||/||(1 - (211.16 + 18.009) / 279.841)|
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))|
|=||(8.233 / (8.233 + 18.009))||/||(13.051 / (13.051 + 32.703))|
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)|
|=||(121.175 / 242.691)||/||(99.399 / 194.54)|
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 + 41.216) / 351.578)||/||((0 + 37.124) / 279.841)|
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|
|=||(76.015 - 0||-||90.879)||/||351.578|
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.
MarketAxess Holdings, Inc. has a M-score of -2.38 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
MarketAxess Holdings, Inc. Annual Data
MarketAxess Holdings, Inc. Quarterly Data