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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 -2.29 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 * 1.1032||+||0.528 * 1.0667||+||0.404 * 1.077||+||0.892 * 1.0432||+||0.115 * 0.8829|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.995||+||4.679 * 0.0005||-||0.327 * 1.0119|
|This Year (Jun14) TTM:||Last Year (Jun13) TTM:|
|Accounts Receivable was $231 Mil.|
Revenue was 564.621 + 636.999 + 557.133 + 539.869 = $2,299 Mil.
Gross Profit was 95.453 + 106.176 + 89.978 + 97.409 = $389 Mil.
Total Current Assets was $534 Mil.
Total Assets was $737 Mil.
Property, Plant and Equipment(Net PPE) was $83 Mil.
Depreciation, Depletion and Amortization(DDA) was $21 Mil.
Selling, General & Admin. Expense(SGA) was $318 Mil.
Total Current Liabilities was $413 Mil.
Long-Term Debt was $0 Mil.
Net Income was 1.891 + 9.564 + 5.289 + 10.082 = $27 Mil.
Non Operating Income was 0.012 + -0.026 + 0.019 + -0.001 = $0 Mil.
Cash Flow from Operations was -38.267 + 8.891 + 69.041 + -13.236 = $26 Mil.
|Accounts Receivable was $200 Mil.
Revenue was 547.274 + 611.836 + 532.438 + 511.953 = $2,204 Mil.
Gross Profit was 97.746 + 108.118 + 93.503 + 98.42 = $398 Mil.
Total Current Assets was $510 Mil.
Total Assets was $708 Mil.
Property, Plant and Equipment(Net PPE) was $91 Mil.
Depreciation, Depletion and Amortization(DDA) was $20 Mil.
Selling, General & Admin. Expense(SGA) was $306 Mil.
Total Current Liabilities was $392 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)|
|=||(230.625 / 2298.622)||/||(200.404 / 2203.501)|
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)|
|=||(106.176 / 2203.501)||/||(95.453 / 2298.622)|
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 - (534.275 + 83.252) / 737.256)||/||(1 - (510.301 + 91.21) / 708.318)|
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))|
|=||(19.908 / (19.908 + 91.21))||/||(21.195 / (21.195 + 83.252))|
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)|
|=||(317.999 / 2298.622)||/||(306.363 / 2203.501)|
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 + 412.63) / 737.256)||/||((0 + 391.79) / 708.318)|
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|
|=||(26.826 - 0.004||-||26.429)||/||737.256|
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 -2.29 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