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Marcus & Millichap Inc (NYSE:MMI)
Beneish M-Score
-2.18 (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 -2.18 signals that the company is a manipulator.

MMI' s Beneish M-Score Range Over the Past 10 Years
Min: -2.77   Max: -2.18
Current: -2.18

-2.77
-2.18

During the past 5 years, the highest Beneish M-Score of Marcus & Millichap Inc was -2.18. The lowest was -2.77. And the median was -2.71.


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 * 0.9086+0.528 * 1.0091+0.404 * 1.6661+0.892 * 1.1995+0.115 * 1.1681
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.7407+4.679 * -0.0435-0.327 * 0.7745
=-2.18

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
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.
Net Income was 15.176 + 17.556 + 13.669 + 16.43 = $62.8 Mil.
Non Operating Income was -0.464 + 0.362 + 0.125 + 0.067 = $0.1 Mil.
Cash Flow from Operations was 16.715 + 39.86 + -17.993 + 36.529 = $75.1 Mil.
Accounts Receivable was $3.6 Mil.
Revenue was 150.889 + 134.265 + 114.59 + 149.101 = $548.8 Mil.
Gross Profit was 58.62 + 54.664 + 46.194 + 54.859 = $214.3 Mil.
Total Current Assets was $154.8 Mil.
Total Assets was $200.2 Mil.
Property, Plant and Equipment(Net PPE) was $7.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $3.2 Mil.
Selling, General & Admin. Expense(SGA) was $161.8 Mil.
Total Current Liabilities was $54.8 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)
=(3.882 / 658.343) / (3.562 / 548.845)
=0.00589662 / 0.00648999
=0.9086

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)
=(67.925 / 548.845) / (63.866 / 658.343)
=0.39052374 / 0.38700495
=1.0091

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 - (185.572 + 9.725) / 284.229) / (1 - (154.791 + 7.829) / 200.221)
=0.31288855 / 0.18779748
=1.6661

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
=658.343 / 548.845
=1.1995

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))
=(3.181 / (3.181 + 7.829)) / (3.196 / (3.196 + 9.725))
=0.28891916 / 0.24734928
=1.1681

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)
=(143.768 / 658.343) / (161.812 / 548.845)
=0.21837857 / 0.29482276
=0.7407

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 + 62.218) / 284.229) / ((10.61 + 54.778) / 200.221)
=0.25292634 / 0.32657913
=0.7745

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
=(62.831 - 0.09 - 75.111) / 284.229
=-0.0435

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 -2.18 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 own currency.

Marcus & Millichap Inc Annual Data

Dec10Dec11Dec12Dec13Dec14
DSRI 0.49710.8027
GMI 1.02591.0122
AQI 0.29620.873
SGI 1.13011.3127
DEPI 1.17560.8916
SGAI 1.25640.6962
LVGI 0.67240.8164
TATA -0.5349-0.0939
M-score -5.52-2.77

Marcus & Millichap Inc Quarterly Data

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
DSRI 0.80270.69790.9086
GMI 1.01221.0111.0091
AQI 0.8731.48351.6661
SGI 1.31271.26171.1995
DEPI 0.89161.00751.1681
SGAI 0.69620.71070.7407
LVGI 0.81640.87180.7745
TATA -0.0939-0.1018-0.0435
M-score -2.77-2.71-2.18
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