Wilshire Bancorp 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 Wilshire Bancorp 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 * 1.0703 | + | 0.528 * 1 | + | 0.404 * 1.0628 | + | 0.892 * 0.9986 | + | 0.115 * 1.1906 |
| - | 0.172 * SGAI | + | 4.679 * TATA | - | 0.327 * LVGI |
| - | 0.172 * 1.1161 | + | 4.679 * 0.019041 | - | 0.327 * 1.1444 |
| = | -2.35 |
* 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 (Mar16) TTM: | Last Year (Mar15) TTM: |
Total Receivables was $9.2 Mil.
Revenue was 47.367 + 48.965 + 46.986 + 48.787 = $192.1 Mil.
Gross Profit was 47.367 + 48.965 + 46.986 + 48.787 = $192.1 Mil.
Total Current Assets was $124.6 Mil.
Total Assets was $4,720.4 Mil.
Property, Plant and Equipment(Net PPE) was $15.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $5.8 Mil.
Selling, General, & Admin. Expense(SGA) was $63.2 Mil.
Total Current Liabilities was $2.4 Mil.
Long-Term Debt & Capital Lease Obligation was $272.1 Mil.
Net Income was 13.19 + 13.948 + 13.285 + 15.553 = $56.0 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was -44.41 + -2.729 + 19.755 + -6.519 = $-33.9 Mil.
|
Total Receivables was $8.6 Mil.
Revenue was 51.758 + 47.38 + 46.366 + 46.873 = $192.4 Mil.
Gross Profit was 51.758 + 47.38 + 46.366 + 46.873 = $192.4 Mil.
Total Current Assets was $370.0 Mil.
Total Assets was $4,413.3 Mil.
Property, Plant and Equipment(Net PPE) was $14.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $6.6 Mil.
Selling, General, & Admin. Expense(SGA) was $56.7 Mil.
Total Current Liabilities was $2.4 Mil.
Long-Term Debt & Capital Lease Obligation was $221.8 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) |
| = | (9.171 / 192.105) | / | (8.581 / 192.377) |
| = | 0.04774 | / | 0.044605 |
| | = | 1.0703 |
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) |
| = | (192.377 / 192.377) | / | (192.105 / 192.105) |
| = | 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 - (124.615 + 15.718) / 4720.401) | / | (1 - (370.019 + 14.058) / 4413.278) |
| = | 0.970271 | / | 0.912972 |
| | = | 1.0628 |
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 |
| = | 192.105 | / | 192.377 |
| | = | 0.9986 |
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)) |
| = | (6.608 / (6.608 + 14.058)) | / | (5.771 / (5.771 + 15.718)) |
| = | 0.319752 | / | 0.268556 |
| | = | 1.1906 |
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) |
| = | (63.238 / 192.105) | / | (56.738 / 192.377) |
| = | 0.329185 | / | 0.294931 |
| | = | 1.1161 |
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) |
| = | ((272.077 + 2.4) / 4720.401) | / | ((221.837 + 2.406) / 4413.278) |
| = | 0.058147 | / | 0.050811 |
| | = | 1.1444 |
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 |
| = | (55.976 - 0 | - | -33.903) | / | 4720.401 |
| | = | 0.019041 |
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.
Wilshire Bancorp has a M-score of -2.35 suggests that the company is unlikely to be a manipulator.
Wilshire Bancorp (Wilshire Bancorp) Business Description
Traded in Other Exchanges
N/A
Address
Wilshire Bancorp Inc was incorporated under the laws of the State of California on May 20, 1980. It is a bank holding company offers a range of financial products and services through its main subsidiary, Wilshire Bank, a California state-chartered commercial bank. It operates in three business segments including Banking Operations, Trade Finance Services and Small Business Administration Lending Services. Banking Operations raises funds from deposits and borrowings for loans and investments and provides lending products including commercial, consumer and real estate loans to customers. Small Business Administration Lending Services provides loans through the SBA guaranteed lending program. Trade Finance Services assists its import/export customers with international transactions. Trade finance products include the issuance and collection of letters of credit, international collection and import/export financing. It is engaged in a complement of lending activities, including commercial real estate and home mortgage lending, commercial business lending & trade finance, SBA lending & consumer loans and construction lending. It offers commercial business loans to sole proprietorships, partnerships and corporations. These loans include business lines of credit and business term loans to finance operations, to provide working capital or for specific purposes, such as to finance the purchase of assets, equipment or inventory. It offers Internet banking, which allows its customers to access their deposit and loan accounts through the Internet. Customers are able to obtain transaction history and account information, transfer funds between accounts, make on-line bill payments, and open deposit accounts. It also offer ATM machines located at selected branch offices, customer access to an ATM network and armored carrier services. Its competitors include national banks, regional banks and other community banks as well as other types of financial institutions, including without limitation, savings and loan institutions, finance companies, brokerage firms, insurance companies, credit unions, mortgage banks and other financial intermediaries. The Company is subject to various regulatory capital requirements administered by the federal banking agencies.
Executives
| Alex Ko |
officer: EVP & CHIEF FINANCIAL OFFICER |
3200 WILSHIRE BOULEVARD, 14TH FLOOR, LOS ANGELES CA 30010 |
| Peter Koh |
officer: EVP & CHIEF CREDIT OFFICER |
3200 WILSHIRE BLVD, LOS ANGELES CA 90010 |
| Donald Byun |
director |
3200 WILSHIRE BLVD, LOS ANGELES CA 90010 |
| Steven Koh |
director |
3200 WILSHIRE BLVD, LOS ANGELES CA 90010 |
| John Taylor |
director |
848 GREENRIDGE DRIVE, LA CANADA FLINTRIDGE CA 91011 |
| Daisy Y Ha |
director |
509 LINDA VISTA AVE, PASADENA CA 91105 |
| Steven J Didion |
director |
3327 FREEMAN RD, WALNUT CREEK CA 94595 |
| Lisa K Pai |
officer: EVP & CHIEF LEGAL/HR OFFICER |
3200 WILSHIRE BOULEVARD, STE 1400, LOS ANGELES CA 90010 |
| Lawrence Seokho Jeon |
director |
3200 WILSHIRE BOULEVARD, 14TH FLOOR, LOS ANGELES CA 90010 |
| Craig Mautner |
director |
3200 WILSHIRE BLVD, STE 1400, LOS ANGELES CA 90010 |
| Jae Whan Yoo |
director, officer: PRESIDENT & CHIEF EXECUTIVE OF |
3660 WILSHIRE BLVD PHA, LOS ANGELES CA 90010 |
| Jung Hak Son |
officer: EVP & CHIEF MARKETING OFFICER |
3660 WILSHIRE BLVD. SUITE PH-A, LOS ANGELES CA 90010 |
| Soo Bong Min |
director, officer: Former President/CEO/Director |
3200 WILSHIRE BLVD, LOS ANGELES CA 90010 |
| Brian Cho |
officer: EVP/Chief Financial Officer |
3200 WILSHIRE BLVD, LOS ANGELES CA 90010 |
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