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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 -3.29 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 -3.45. And the median was -2.66.
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 * 0.7859||+||0.528 * 1.0638||+||0.404 * 0.9953||+||0.892 * 1.0936||+||0.115 * 0.7325|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.1539||+||4.679 * -0.1463||-||0.327 * 0.9562|
* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.
|This Year (Jun14) TTM:||Last Year (Jun13) TTM:|
|Accounts Receivable was $21.4 Mil.|
Revenue was 36.727 + 66.556 + 56.608 + 57.112 = $217.0 Mil.
Gross Profit was 15.625 + 38.962 + 32.977 + 32.113 = $119.7 Mil.
Total Current Assets was $49.8 Mil.
Total Assets was $244.3 Mil.
Property, Plant and Equipment(Net PPE) was $48.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $16.9 Mil.
Selling, General & Admin. Expense(SGA) was $82.0 Mil.
Total Current Liabilities was $55.2 Mil.
Long-Term Debt was $103.0 Mil.
Net Income was -3.771 + 9.71 + 6.261 + -5.494 = $6.7 Mil.
Non Operating Income was 1.681 + 0.078 + 0.061 + 0.406 = $2.2 Mil.
Cash Flow from Operations was 9.633 + -1.41 + 11.324 + 20.68 = $40.2 Mil.
|Accounts Receivable was $24.8 Mil.
Revenue was 40.023 + 57.38 + 49.799 + 51.227 = $198.4 Mil.
Gross Profit was 22.129 + 35.08 + 29.822 + 29.389 = $116.4 Mil.
Total Current Assets was $41.0 Mil.
Total Assets was $234.7 Mil.
Property, Plant and Equipment(Net PPE) was $52.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $12.3 Mil.
Selling, General & Admin. Expense(SGA) was $65.0 Mil.
Total Current Liabilities was $37.7 Mil.
Long-Term Debt was $121.3 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)|
|=||(21.35 / 217.003)||/||(24.84 / 198.429)|
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)|
|=||(38.962 / 198.429)||/||(15.625 / 217.003)|
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 - (49.755 + 48.675) / 244.277)||/||(1 - (41.019 + 52.905) / 234.747)|
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))|
|=||(12.317 / (12.317 + 52.905))||/||(16.909 / (16.909 + 48.675))|
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)|
|=||(82.014 / 217.003)||/||(64.993 / 198.429)|
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)|
|=||((103.026 + 55.174) / 244.277)||/||((121.336 + 37.651) / 234.747)|
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|
|=||(6.706 - 2.226||-||40.227)||/||244.277|
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 -3.29 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
Higher One Holdings Inc Annual Data
Higher One Holdings Inc Quarterly Data