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Marcus & Millichap Inc (NYSE:MMI)
Beneish M-Score
-2.12 (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 -2.12 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: -2.12

-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 * 1.1442+0.528 * 1.0159+0.404 * 1.4095+0.892 * 1.111+0.115 * 1.1922
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0145+4.679 * -0.0267-0.327 * 0.8074
=-2.12

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $4.9 Mil.
Revenue was 180.634 + 183.387 + 164.272 + 203.156 = $731.4 Mil.
Gross Profit was 66.782 + 70.261 + 68.119 + 73.492 = $278.7 Mil.
Total Current Assets was $185.6 Mil.
Total Assets was $360.0 Mil.
Property, Plant and Equipment(Net PPE) was $15.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $4.1 Mil.
Selling, General & Admin. Expense(SGA) was $162.0 Mil.
Total Current Liabilities was $64.8 Mil.
Long-Term Debt was $8.7 Mil.
Net Income was 15.144 + 17.524 + 14.815 + 19.949 = $67.4 Mil.
Non Operating Income was 0.719 + 0.618 + 0.23 + 0.42 = $2.0 Mil.
Cash Flow from Operations was 29.258 + 31.283 + -19.023 + 33.538 = $75.1 Mil.
Accounts Receivable was $3.9 Mil.
Revenue was 165.876 + 173.482 + 146.541 + 172.444 = $658.3 Mil.
Gross Profit was 63.866 + 67.925 + 60.383 + 62.608 = $254.8 Mil.
Total Current Assets was $185.6 Mil.
Total Assets was $284.2 Mil.
Property, Plant and Equipment(Net PPE) was $9.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $3.2 Mil.
Selling, General & Admin. Expense(SGA) was $143.8 Mil.
Total Current Liabilities was $62.2 Mil.
Long-Term Debt was $9.7 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)
=(4.935 / 731.449) / (3.882 / 658.343)
=0.00674688 / 0.00589662
=1.1442

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)
=(254.782 / 658.343) / (278.654 / 731.449)
=0.38700495 / 0.38096163
=1.0159

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 - (185.644 + 15.585) / 359.996) / (1 - (185.572 + 9.725) / 284.229)
=0.44102434 / 0.31288855
=1.4095

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
=731.449 / 658.343
=1.111

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))
=(3.196 / (3.196 + 9.725)) / (4.08 / (4.08 + 15.585))
=0.24734928 / 0.20747521
=1.1922

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)
=(162.049 / 731.449) / (143.768 / 658.343)
=0.22154518 / 0.21837857
=1.0145

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)
=((8.686 + 64.828) / 359.996) / ((9.671 + 62.218) / 284.229)
=0.20420782 / 0.25292634
=0.8074

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
=(67.432 - 1.987 - 75.056) / 359.996
=-0.0267

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 -2.12 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 local exchange's 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

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 0.80270.69790.90860.81341.1830.79591.1442
GMI 1.01221.0111.00911.00671.0111.00811.0159
AQI 1.12331.48351.66611.35271.42651.10881.4095
SGI 1.31271.26171.19951.20421.16991.1141.111
DEPI 0.89161.00751.16811.32471.29161.31311.1922
SGAI 0.69620.71070.74070.91350.96350.99081.0145
LVGI 0.81640.87180.77450.79140.74610.71870.8074
TATA -0.0939-0.1018-0.0435-0.0193-0.01390.0126-0.0267
M-score -2.67-2.71-2.18-2.29-1.92-2.33-2.12
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