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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.
Insperity Inc has a M-score of -2.30 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Insperity Inc was 0.20. The lowest was -3.48. And the median was -2.57.
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 Insperity 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 * 1.0969||+||0.528 * 1.038||+||0.404 * 1.0404||+||0.892 * 1.0486||+||0.115 * 0.853|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0129||+||4.679 * 0.0063||-||0.327 * 1.01|
|This Year (Mar14) TTM:||Last Year (Mar13) TTM:|
|Accounts Receivable was $231 Mil.|
Revenue was 636.999 + 557.133 + 539.869 + 547.274 = $2,281 Mil.
Gross Profit was 106.176 + 89.978 + 97.409 + 97.746 = $391 Mil.
Total Current Assets was $598 Mil.
Total Assets was $799 Mil.
Property, Plant and Equipment(Net PPE) was $84 Mil.
Depreciation, Depletion and Amortization(DDA) was $21 Mil.
Selling, General & Admin. Expense(SGA) was $316 Mil.
Total Current Liabilities was $475 Mil.
Long-Term Debt was $0 Mil.
Net Income was 9.564 + 5.289 + 10.082 + 3.488 = $28 Mil.
Non Operating Income was -0.026 + 0.019 + -0.001 + -2.676 = $-3 Mil.
Cash Flow from Operations was 8.891 + 69.041 + -13.236 + -38.613 = $26 Mil.
|Accounts Receivable was $201 Mil.
Revenue was 611.836 + 532.438 + 511.953 + 519.256 = $2,175 Mil.
Gross Profit was 108.118 + 93.503 + 98.42 + 87.294 = $387 Mil.
Total Current Assets was $561 Mil.
Total Assets was $761 Mil.
Property, Plant and Equipment(Net PPE) was $92 Mil.
Depreciation, Depletion and Amortization(DDA) was $19 Mil.
Selling, General & Admin. Expense(SGA) was $298 Mil.
Total Current Liabilities was $447 Mil.
Long-Term Debt was $0 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)|
|=||(231.439 / 2281.275)||/||(201.2 / 2175.483)|
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)|
|=||(89.978 / 2175.483)||/||(106.176 / 2281.275)|
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 - (598.037 + 83.933) / 799.389)||/||(1 - (561.159 + 92.15) / 760.711)|
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))|
|=||(19.106 / (19.106 + 92.15))||/||(21.158 / (21.158 + 83.933))|
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)|
|=||(316.009 / 2281.275)||/||(297.504 / 2175.483)|
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)|
|=||((0 + 474.892) / 799.389)||/||((0 + 447.459) / 760.711)|
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|
|=||(28.423 - -2.684||-||26.083)||/||799.389|
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.
Insperity Inc has a M-score of -2.30 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
Insperity Inc Annual Data
Insperity Inc Quarterly Data