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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 5 years, the highest Beneish M-Score of Marcus & Millichap, Inc. was -2.71. The lowest was -2.71. And the median was -2.71.
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 * 0.6979||+||0.528 * 1.011||+||0.404 * 1.4835||+||0.892 * 1.2617||+||0.115 * 1.0075|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.7107||+||4.679 * -0.1018||-||0.327 * 0.8718|
|This Year (Jun15) TTM:||Last Year (Jun14) TTM:|
|Accounts Receivable was $5.1 Mil.|
Revenue was 173.482 + 146.541 + 172.444 + 150.889 = $643.4 Mil.
Gross Profit was 67.925 + 60.383 + 62.608 + 58.62 = $249.5 Mil.
Total Current Assets was $162.0 Mil.
Total Assets was $260.6 Mil.
Property, Plant and Equipment(Net PPE) was $8.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $3.2 Mil.
Selling, General & Admin. Expense(SGA) was $142.2 Mil.
Total Current Liabilities was $58.3 Mil.
Long-Term Debt was $9.7 Mil.
Net Income was 17.556 + 13.669 + 16.43 + 13.523 = $61.2 Mil.
Non Operating Income was 0.362 + 0.125 + 0.067 + -0.308 = $0.2 Mil.
Cash Flow from Operations was 39.86 + -17.993 + 36.529 + 29.06 = $87.5 Mil.
|Accounts Receivable was $5.8 Mil.
Revenue was 134.265 + 114.59 + 149.101 + 111.953 = $509.9 Mil.
Gross Profit was 54.664 + 46.194 + 54.859 + 44.235 = $200.0 Mil.
Total Current Assets was $123.8 Mil.
Total Assets was $172.1 Mil.
Property, Plant and Equipment(Net PPE) was $8.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $3.1 Mil.
Selling, General & Admin. Expense(SGA) was $158.6 Mil.
Total Current Liabilities was $40.9 Mil.
Long-Term Debt was $10.6 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)|
|=||(5.131 / 643.356)||/||(5.827 / 509.909)|
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)|
|=||(60.383 / 509.909)||/||(67.925 / 643.356)|
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 - (162.002 + 8.593) / 260.632)||/||(1 - (123.774 + 8.261) / 172.116)|
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))|
|=||(3.115 / (3.115 + 8.261))||/||(3.207 / (3.207 + 8.593))|
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)|
|=||(142.208 / 643.356)||/||(158.589 / 509.909)|
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 + 58.344) / 260.632)||/||((10.61 + 40.908) / 172.116)|
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|
|=||(61.178 - 0.246||-||87.456)||/||260.632|
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 -2.71 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
Marcus & Millichap, Inc. Annual Data
Marcus & Millichap, Inc. Quarterly Data