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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.
Higher One Holdings Inc has a M-score of -2.63 suggests that the company is not a manipulator.
During the past 6 years, the highest Beneish M-Score of Higher One Holdings Inc was 0.87. The lowest was -3.23. And the median was -2.59.
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 Higher One Holdings 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 * 1.103||+||0.528 * 1.075||+||0.404 * 0.9295||+||0.892 * 1.0751||+||0.115 * 0.7431|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0702||+||4.679 * -0.0655||-||0.327 * 0.9144|
|This Year (Sep14) TTM:||Last Year (Sep13) TTM:|
|Accounts Receivable was $12.0 Mil.|
Revenue was 59.775 + 36.727 + 66.556 + 56.608 = $219.7 Mil.
Gross Profit was 31.593 + 15.625 + 38.962 + 32.977 = $119.2 Mil.
Total Current Assets was $66.5 Mil.
Total Assets was $255.4 Mil.
Property, Plant and Equipment(Net PPE) was $48.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $18.2 Mil.
Selling, General & Admin. Expense(SGA) was $81.9 Mil.
Total Current Liabilities was $60.6 Mil.
Long-Term Debt was $102.9 Mil.
Net Income was 4.916 + -3.771 + 9.71 + 6.261 = $17.1 Mil.
Non Operating Income was -0.198 + 1.681 + 0.078 + 0.061 = $1.6 Mil.
Cash Flow from Operations was 12.68 + 9.633 + -1.41 + 11.324 = $32.2 Mil.
|Accounts Receivable was $10.1 Mil.
Revenue was 57.112 + 40.023 + 57.38 + 49.799 = $204.3 Mil.
Gross Profit was 32.113 + 22.129 + 35.08 + 29.822 = $119.1 Mil.
Total Current Assets was $43.9 Mil.
Total Assets was $237.6 Mil.
Property, Plant and Equipment(Net PPE) was $52.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $13.5 Mil.
Selling, General & Admin. Expense(SGA) was $71.2 Mil.
Total Current Liabilities was $57.1 Mil.
Long-Term Debt was $109.3 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)|
|=||(11.982 / 219.666)||/||(10.104 / 204.314)|
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)|
|=||(15.625 / 204.314)||/||(31.593 / 219.666)|
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 - (66.514 + 48.178) / 255.365)||/||(1 - (43.895 + 52.879) / 237.576)|
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))|
|=||(13.501 / (13.501 + 52.879))||/||(18.157 / (18.157 + 48.178))|
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)|
|=||(81.92 / 219.666)||/||(71.197 / 204.314)|
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)|
|=||((102.948 + 60.563) / 255.365)||/||((109.258 + 57.11) / 237.576)|
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|
|=||(17.116 - 1.622||-||32.227)||/||255.365|
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.
Higher One Holdings Inc has a M-score of -2.63 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
Higher One Holdings Inc Annual Data
Higher One Holdings Inc Quarterly Data