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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.
During the past 13 years, the highest Beneish M-Score of Insight Enterprises Inc was 64.29. The lowest was -4.14. And the median was -2.38.
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 Insight Enterprises 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 * 1.056||+||0.528 * 0.9743||+||0.404 * 1.2804||+||0.892 * 0.995||+||0.115 * 0.8573|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0172||+||4.679 * 0.0283||-||0.327 * 1.038|
|This Year (Sep16) TTM:||Last Year (Sep15) TTM:|
|Accounts Receivable was $1,162 Mil.|
Revenue was 1392.716 + 1456.234 + 1168.982 + 1387.185 = $5,405 Mil.
Gross Profit was 181.808 + 209.217 + 161.108 + 180.853 = $733 Mil.
Total Current Assets was $1,667 Mil.
Total Assets was $1,917 Mil.
Property, Plant and Equipment(Net PPE) was $77 Mil.
Depreciation, Depletion and Amortization(DDA) was $40 Mil.
Selling, General & Admin. Expense(SGA) was $588 Mil.
Total Current Liabilities was $938 Mil.
Long-Term Debt was $243 Mil.
Net Income was 21.635 + 35.067 + 6.888 + 18.576 = $82 Mil.
Non Operating Income was -0.931 + -0.206 + -0.884 + -0.861 = $-3 Mil.
Cash Flow from Operations was -120.235 + 42.279 + -47.187 + 155.868 = $31 Mil.
|Accounts Receivable was $1,106 Mil.
Revenue was 1342.195 + 1424.031 + 1219.679 + 1446.134 = $5,432 Mil.
Gross Profit was 182.251 + 191.415 + 161.813 + 182.239 = $718 Mil.
Total Current Assets was $1,502 Mil.
Total Assets was $1,717 Mil.
Property, Plant and Equipment(Net PPE) was $93 Mil.
Depreciation, Depletion and Amortization(DDA) was $38 Mil.
Selling, General & Admin. Expense(SGA) was $581 Mil.
Total Current Liabilities was $934 Mil.
Long-Term Debt was $85 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(1162.424 / 5405.117)||/||(1106.231 / 5432.039)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(717.718 / 5432.039)||/||(732.986 / 5405.117)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (1666.85 + 76.614) / 1916.803)||/||(1 - (1502.497 + 92.864) / 1716.596)|
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.
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))|
|=||(38.348 / (38.348 + 92.864))||/||(39.628 / (39.628 + 76.614))|
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)|
|=||(588.228 / 5405.117)||/||(581.19 / 5432.039)|
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)|
|=||((243.372 + 937.548) / 1916.803)||/||((85.057 + 933.757) / 1716.596)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(82.166 - -2.882||-||30.725)||/||1916.803|
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.
Insight Enterprises Inc has a M-score of -2.23 suggests that the company will not be a manipulator.
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
Insight Enterprises Inc Annual Data
Insight Enterprises Inc Quarterly Data