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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 0.00. The lowest was 0.00. And the median was 0.00.
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 * 1.1049||+||0.528 * 1.0061||+||0.404 * 1.0434||+||0.892 * 1.2557||+||0.115 * 0.9239|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.7001||+||4.679 * -0.0659||-||0.327 * 0.7569|
|This Year (Mar15) TTM:||Last Year (Mar14) TTM:|
|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.
Net Income was 13.669 + 16.43 + 13.523 + 12.796 = $56.4 Mil.
Non Operating Income was 0.125 + 0.067 + -0.308 + 0.33 = $0.2 Mil.
Cash Flow from Operations was -17.993 + 36.529 + 29.06 + 22.924 = $70.5 Mil.
|Accounts Receivable was $3.3 Mil.
Revenue was 114.59 + 149.101 + 111.953 + 105.471 = $481.1 Mil.
Gross Profit was 46.194 + 54.859 + 44.235 + 44.015 = $189.3 Mil.
Total Current Assets was $98.8 Mil.
Total Assets was $146.2 Mil.
Property, Plant and Equipment(Net PPE) was $8.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $3.1 Mil.
Selling, General & Admin. Expense(SGA) was $155.6 Mil.
Total Current Liabilities was $31.6 Mil.
Long-Term Debt was $11.5 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)|
|=||(4.591 / 604.139)||/||(3.309 / 481.115)|
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)|
|=||(62.608 / 481.115)||/||(60.383 / 604.139)|
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 - (149.089 + 8.038) / 217.329)||/||(1 - (98.821 + 8.537) / 146.162)|
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))|
|=||(3.058 / (3.058 + 8.537))||/||(3.211 / (3.211 + 8.038))|
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)|
|=||(136.746 / 604.139)||/||(155.554 / 481.115)|
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)|
|=||((10.61 + 37.879) / 217.329)||/||((11.464 + 31.618) / 146.162)|
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|
|=||(56.418 - 0.214||-||70.52)||/||217.329|
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 -2.32 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