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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 Insperity Inc was 16.67. The lowest was -3.48. And the median was -2.67.
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 * 0.5799||+||0.528 * 1.0184||+||0.404 * 1.2607||+||0.892 * 1.1043||+||0.115 * 0.8752|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.938||+||4.679 * -0.0326||-||0.327 * 0.992|
|This Year (Dec15) TTM:||Last Year (Dec14) TTM:|
|Accounts Receivable was $8 Mil.|
Revenue was 650.011 + 626.286 + 627.838 + 699.479 = $2,604 Mil.
Gross Profit was 97.045 + 106.743 + 104.219 + 129.86 = $438 Mil.
Total Current Assets was $542 Mil.
Total Assets was $785 Mil.
Property, Plant and Equipment(Net PPE) was $62 Mil.
Depreciation, Depletion and Amortization(DDA) was $19 Mil.
Selling, General & Admin. Expense(SGA) was $343 Mil.
Total Current Liabilities was $488 Mil.
Long-Term Debt was $0 Mil.
Net Income was 6.339 + 11.95 + 7.314 + 13.787 = $39 Mil.
Non Operating Income was -0.097 + 0.016 + -0.032 + 0 = $-0 Mil.
Cash Flow from Operations was 90.759 + 45.803 + -33.529 + -37.95 = $65 Mil.
|Accounts Receivable was $12 Mil.
Revenue was 595.865 + 560.303 + 564.621 + 636.999 = $2,358 Mil.
Gross Profit was 101.359 + 100.817 + 95.453 + 106.176 = $404 Mil.
Total Current Assets was $563 Mil.
Total Assets was $793 Mil.
Property, Plant and Equipment(Net PPE) was $84 Mil.
Depreciation, Depletion and Amortization(DDA) was $21 Mil.
Selling, General & Admin. Expense(SGA) was $331 Mil.
Total Current Liabilities was $496 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)|
|=||(7.691 / 2603.614)||/||(12.01 / 2357.788)|
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)|
|=||(106.743 / 2357.788)||/||(97.045 / 2603.614)|
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 - (542.048 + 61.759) / 784.912)||/||(1 - (563.193 + 84.345) / 792.595)|
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))|
|=||(21.387 / (21.387 + 84.345))||/||(18.565 / (18.565 + 61.759))|
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)|
|=||(343.123 / 2603.614)||/||(331.257 / 2357.788)|
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 + 487.711) / 784.912)||/||((0 + 496.451) / 792.595)|
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|
|=||(39.39 - -0.113||-||65.083)||/||784.912|
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 -2.81 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