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Marcus & Millichap Inc (NYSE:MMI)
Beneish M-Score
-2.29 (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 -2.29 suggests that the company is not a manipulator.

MMI' s Beneish M-Score Range Over the Past 10 Years
Min: -2.67   Max: -2.29
Current: -2.29

-2.67
-2.29

During the past 6 years, the highest Beneish M-Score of Marcus & Millichap Inc was -2.29. The lowest was -2.67. And the median was -2.48.


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 * 0.8134+0.528 * 1.0067+0.404 * 1.3527+0.892 * 1.2042+0.115 * 1.3247
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9135+4.679 * -0.0193-0.327 * 0.7914
=-2.29

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $3.3 Mil.
Revenue was 203.156 + 165.876 + 173.482 + 146.541 = $689.1 Mil.
Gross Profit was 73.492 + 63.866 + 67.925 + 60.383 = $265.7 Mil.
Total Current Assets was $196.1 Mil.
Total Assets was $321.2 Mil.
Property, Plant and Equipment(Net PPE) was $11.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $3.3 Mil.
Selling, General & Admin. Expense(SGA) was $147.7 Mil.
Total Current Liabilities was $75.0 Mil.
Long-Term Debt was $9.7 Mil.
Net Income was 19.949 + 15.176 + 17.556 + 13.669 = $66.4 Mil.
Non Operating Income was 0.42 + -0.464 + 0.362 + 0.125 = $0.4 Mil.
Cash Flow from Operations was 33.538 + 16.715 + 39.86 + -17.993 = $72.1 Mil.
Accounts Receivable was $3.4 Mil.
Revenue was 172.444 + 150.889 + 134.265 + 114.59 = $572.2 Mil.
Gross Profit was 62.608 + 58.62 + 54.664 + 46.194 = $222.1 Mil.
Total Current Assets was $164.9 Mil.
Total Assets was $233.6 Mil.
Property, Plant and Equipment(Net PPE) was $7.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $3.2 Mil.
Selling, General & Admin. Expense(SGA) was $134.3 Mil.
Total Current Liabilities was $67.2 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)
=(3.342 / 689.055) / (3.412 / 572.188)
=0.00485012 / 0.00596308
=0.8134

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)
=(63.866 / 572.188) / (73.492 / 689.055)
=0.38813467 / 0.38555123
=1.0067

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 - (196.114 + 11.579) / 321.225) / (1 - (164.873 + 7.693) / 233.604)
=0.35343451 / 0.26128833
=1.3527

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
=689.055 / 572.188
=1.2042

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))
=(3.206 / (3.206 + 7.693)) / (3.305 / (3.305 + 11.579))
=0.29415543 / 0.22205052
=1.3247

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)
=(147.71 / 689.055) / (134.274 / 572.188)
=0.21436605 / 0.23466763
=0.9135

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 + 75.011) / 321.225) / ((10.61 + 67.204) / 233.604)
=0.26362207 / 0.33310217
=0.7914

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
=(66.35 - 0.443 - 72.12) / 321.225
=-0.0193

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 -2.29 suggests that the company will not 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 -0.5349-0.0939-0.0193
M-score -5.52-2.67-2.29

Marcus & Millichap Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 0.80270.69790.90860.8134
GMI 1.01221.0111.00911.0067
AQI 1.12331.48351.66611.3527
SGI 1.31271.26171.19951.2042
DEPI 0.89161.00751.16811.3247
SGAI 0.69620.71070.74070.9135
LVGI 0.81640.87180.77450.7914
TATA -0.0939-0.1018-0.0435-0.0193
M-score -2.67-2.71-2.18-2.29
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