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Marcus & Millichap Inc (NYSE:MMI)
Beneish M-Score
-1.92 (As of Today)

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.

Marcus & Millichap Inc has a M-score of -1.92 signals that the company is a manipulator.

MMI' s Beneish M-Score Range Over the Past 10 Years
Min: -2.71   Max: -1.92
Current: -1.92

-2.71
-1.92

During the past 6 years, the highest Beneish M-Score of Marcus & Millichap Inc was -1.92. The lowest was -2.71. And the median was -2.29.


Definition

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 Marcus & Millichap 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 * 1.183+0.528 * 1.011+0.404 * 1.4265+0.892 * 1.1699+0.115 * 1.2916
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9635+4.679 * -0.0139-0.327 * 0.7461
=-1.92

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $6.4 Mil.
Revenue was 164.272 + 203.156 + 165.876 + 173.482 = $706.8 Mil.
Gross Profit was 68.119 + 73.492 + 63.866 + 67.925 = $273.4 Mil.
Total Current Assets was $167.5 Mil.
Total Assets was $297.6 Mil.
Property, Plant and Equipment(Net PPE) was $12.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $3.5 Mil.
Selling, General & Admin. Expense(SGA) was $154.1 Mil.
Total Current Liabilities was $39.9 Mil.
Long-Term Debt was $9.7 Mil.
Net Income was 14.815 + 19.949 + 15.176 + 17.556 = $67.5 Mil.
Non Operating Income was 0.23 + 0.42 + -0.464 + 0.362 = $0.5 Mil.
Cash Flow from Operations was -19.023 + 33.538 + 16.715 + 39.86 = $71.1 Mil.
Accounts Receivable was $4.6 Mil.
Revenue was 146.541 + 172.444 + 150.889 + 134.265 = $604.1 Mil.
Gross Profit was 60.383 + 62.608 + 58.62 + 54.664 = $236.3 Mil.
Total Current Assets was $149.1 Mil.
Total Assets was $217.3 Mil.
Property, Plant and Equipment(Net PPE) was $8.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $3.2 Mil.
Selling, General & Admin. Expense(SGA) was $136.7 Mil.
Total Current Liabilities was $37.9 Mil.
Long-Term Debt was $10.6 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(6.354 / 706.786) / (4.591 / 604.139)
=0.00898999 / 0.00759924
=1.183

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.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(236.275 / 604.139) / (273.402 / 706.786)
=0.39109377 / 0.3868243
=1.011

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (167.542 + 12.446) / 297.582) / (1 - (149.089 + 8.038) / 217.329)
=0.39516503 / 0.27700859
=1.4265

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.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=706.786 / 604.139
=1.1699

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))
=(3.211 / (3.211 + 8.038)) / (3.531 / (3.531 + 12.446))
=0.2854476 / 0.22100519
=1.2916

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)
=(154.136 / 706.786) / (136.746 / 604.139)
=0.21808015 / 0.22634857
=0.9635

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)
=((9.671 + 39.867) / 297.582) / ((10.61 + 37.879) / 217.329)
=0.1664684 / 0.22311334
=0.7461

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(67.496 - 0.548 - 71.09) / 297.582
=-0.0139

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.

Marcus & Millichap Inc has a M-score of -1.92 signals that the company is likely to be a manipulator.


Related Terms

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


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Marcus & Millichap Inc Annual Data

Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.49710.80270.8134
GMI 1.02591.01221.0067
AQI 0.29621.12331.3527
SGI 1.13011.31271.2042
DEPI 1.17560.89161.3247
SGAI 1.25640.69620.9135
LVGI 0.67240.81640.7914
TATA -0.5343-0.0939-0.0193
M-score -5.51-2.67-2.29

Marcus & Millichap Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 0.80270.69790.90860.81341.183
GMI 1.01221.0111.00911.00671.011
AQI 1.12331.48351.66611.35271.4265
SGI 1.31271.26171.19951.20421.1699
DEPI 0.89161.00751.16811.32471.2916
SGAI 0.69620.71070.74070.91350.9635
LVGI 0.81640.87180.77450.79140.7461
TATA -0.0939-0.1018-0.0435-0.0193-0.0139
M-score -2.67-2.71-2.18-2.29-1.92
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