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Marcus & Millichap Inc (NYSE:MMI)
Beneish M-Score
-2.16 (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 -2.16 signals that the company is a manipulator.

MMI' s Beneish M-Score Range Over the Past 10 Years
Min: -2.67   Max: -2.16
Current: -2.16

-2.67
-2.16

During the past 7 years, the highest Beneish M-Score of Marcus & Millichap Inc was -2.16. The lowest was -2.67. 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 * 1.382+0.528 * 1.0144+0.404 * 1.0315+0.892 * 1.0412+0.115 * 1.0499
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.052+4.679 * -0.0304-0.327 * 0.8362
=-2.16

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

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $4.8 Mil.
Revenue was 189.157 + 180.634 + 183.387 + 164.272 = $717.5 Mil.
Gross Profit was 67.52 + 66.782 + 70.261 + 68.119 = $272.7 Mil.
Total Current Assets was $234.0 Mil.
Total Assets was $394.0 Mil.
Property, Plant and Equipment(Net PPE) was $16.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $4.4 Mil.
Selling, General & Admin. Expense(SGA) was $161.8 Mil.
Total Current Liabilities was $78.2 Mil.
Long-Term Debt was $8.7 Mil.
Net Income was 17.174 + 15.144 + 17.524 + 14.815 = $64.7 Mil.
Non Operating Income was 0.567 + 0.719 + 0.618 + 0.23 = $2.1 Mil.
Cash Flow from Operations was 32.968 + 29.258 + 31.283 + -19.023 = $74.5 Mil.
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.



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)
=(4.809 / 717.45) / (3.342 / 689.055)
=0.00670291 / 0.00485012
=1.382

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)
=(265.666 / 689.055) / (272.682 / 717.45)
=0.38555123 / 0.38007109
=1.0144

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 - (234.012 + 16.355) / 394.016) / (1 - (196.114 + 11.579) / 321.225)
=0.36457657 / 0.35343451
=1.0315

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
=717.45 / 689.055
=1.0412

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))
=(3.305 / (3.305 + 11.579)) / (4.387 / (4.387 + 16.355))
=0.22205052 / 0.21150323
=1.0499

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)
=(161.794 / 717.45) / (147.71 / 689.055)
=0.22551258 / 0.21436605
=1.052

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 + 78.176) / 394.016) / ((9.671 + 75.011) / 321.225)
=0.22045298 / 0.26362207
=0.8362

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
=(64.657 - 2.134 - 74.486) / 394.016
=-0.0304

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 -2.16 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

Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.49710.80270.81341.382
GMI 1.02591.01221.00671.0144
AQI 0.29621.12331.35271.0315
SGI 1.13011.31271.20421.0412
DEPI 1.17560.89161.32471.0499
SGAI 1.25640.69620.91351.052
LVGI 0.67240.81640.79140.8362
TATA -0.5349-0.0939-0.0193-0.0304
M-score -5.52-2.67-2.29-2.16

Marcus & Millichap Inc Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 0.80270.69790.90860.81341.1830.85951.14421.382
GMI 1.01221.0111.00911.00671.0111.00811.01591.0144
AQI 1.12331.48351.66611.35271.42651.10881.40951.0315
SGI 1.31271.26171.19951.20421.16991.1141.1111.0412
DEPI 0.89161.00751.16811.32471.29161.31311.19221.0499
SGAI 0.69620.71070.74070.91350.96350.99081.01451.052
LVGI 0.81640.87180.77450.79140.74610.71870.80740.8362
TATA -0.0939-0.1018-0.0435-0.0193-0.01390.0126-0.0267-0.0304
M-score -2.67-2.71-2.18-2.29-1.92-2.27-2.12-2.16
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