Marlin Business Services Beneish M-Score Calculation
The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Altman Z-Score) or business trend (Piotroski 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 Marlin Business Services 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 * 1.1924 | + | 0.528 * 1 | + | 0.404 * 1.0259 | + | 0.892 * 0.7167 | + | 0.115 * 0.9455 |
| - | 0.172 * SGAI | + | 4.679 * TATA | - | 0.327 * LVGI |
| - | 0.172 * 1.3217 | + | 4.679 * 0.01827 | - | 0.327 * 0.5852 |
| = | -2.39 |
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
| This Year (Sep21) TTM: | Last Year (Sep20) TTM: |
Total Receivables was $315.28 Mil.
Revenue was 20.546 + 20.649 + 21.032 + 22.006 = $84.23 Mil.
Gross Profit was 20.546 + 20.649 + 21.032 + 22.006 = $84.23 Mil.
Total Current Assets was $538.53 Mil.
Total Assets was $1,067.31 Mil.
Property, Plant and Equipment(Net PPE) was $16.63 Mil.
Depreciation, Depletion and Amortization(DDA) was $3.78 Mil.
Selling, General, & Admin. Expense(SGA) was $47.93 Mil.
Total Current Liabilities was $25.29 Mil.
Long-Term Debt & Capital Lease Obligation was $19.81 Mil.
Net Income was 5.481 + 10.256 + 6.851 + 15.302 = $37.89 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.00 Mil.
Cash Flow from Operations was 9.984 + -13.578 + 7.032 + 14.952 = $18.39 Mil.
|
Total Receivables was $368.90 Mil.
Revenue was 24.597 + 25.445 + 30.25 + 37.231 = $117.52 Mil.
Gross Profit was 24.597 + 25.445 + 30.25 + 37.231 = $117.52 Mil.
Total Current Assets was $572.48 Mil.
Total Assets was $1,105.95 Mil.
Property, Plant and Equipment(Net PPE) was $16.15 Mil.
Depreciation, Depletion and Amortization(DDA) was $3.43 Mil.
Selling, General, & Admin. Expense(SGA) was $50.60 Mil.
Total Current Liabilities was $31.24 Mil.
Long-Term Debt & Capital Lease Obligation was $48.62 Mil.
|
1. DSRI = Days Sales in Receivables Index
Measured as the ratio of Revenue in Total 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) |
| = | (315.277 / 84.233) | / | (368.896 / 117.523) |
| = | 3.742915 | / | 3.138926 |
| | = | 1.1924 |
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) |
| = | (117.523 / 117.523) | / | (84.233 / 84.233) |
| = | 1 | / | 1 |
| | = | 1 |
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 Property, Plant and Equipment to Total Assets.
| AQI | = | (1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) | / | (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1) |
| = | (1 - (538.533 + 16.627) / 1067.312) | / | (1 - (572.484 + 16.151) / 1105.951) |
| = | 0.479852 | / | 0.467757 |
| | = | 1.0259 |
4. SGI = Sales Growth Index
Ratio of Revenue 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 |
| = | 84.233 | / | 117.523 |
| | = | 0.7167 |
5. DEPI = Depreciation Index
Measured as the ratio of the rate of Depreciation, Depletion and Amortization 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)) |
| = | (3.429 / (3.429 + 16.151)) | / | (3.78 / (3.78 + 16.627)) |
| = | 0.175128 | / | 0.185231 |
| | = | 0.9455 |
Note: If the Depreciation, Depletion and Amortization data is not available, we assume that the depreciation rate is constant and set the Depreciation Index to 1.
6. SGAI = Sales, General and Administrative expenses Index
The ratio of Selling, General, & Admin. Expense(SGA) to Sales 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) |
| = | (47.934 / 84.233) | / | (50.6 / 117.523) |
| = | 0.569064 | / | 0.430554 |
| | = | 1.3217 |
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 in leverage
| LVGI | = | ((LTD_t + CurrentLiabilities_t) / TotalAssets_t) | / | ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1) |
| = | ((19.81 + 25.289) / 1067.312) | / | ((48.623 + 31.239) / 1105.951) |
| = | 0.042255 | / | 0.072211 |
| | = | 0.5852 |
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 |
| = | (37.89 - 0 | - | 18.39) | / | 1067.312 |
| | = | 0.01827 |
An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator. An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.
Marlin Business Services has a M-score of -2.39 suggests that the company is unlikely to be a manipulator.
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
Portfolio Contest
MRLN has been successfully added to your