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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 -2.24 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 -2.64.
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 * 1.3663||+||0.528 * 1.0269||+||0.404 * 1.1715||+||0.892 * 1.1165||+||0.115 * 0.7204|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.171||+||4.679 * -0.0437||-||0.327 * 1.0664|
|This Year (Mar14) TTM:||Last Year (Mar13) TTM:|
|Accounts Receivable was $20.5 Mil.|
Revenue was 66.556 + 56.608 + 57.112 + 40.023 = $220.3 Mil.
Gross Profit was 38.962 + 32.977 + 32.113 + 22.129 = $126.2 Mil.
Total Current Assets was $36.6 Mil.
Total Assets was $232.5 Mil.
Property, Plant and Equipment(Net PPE) was $49.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $16.0 Mil.
Selling, General & Admin. Expense(SGA) was $79.5 Mil.
Total Current Liabilities was $40.8 Mil.
Long-Term Debt was $103.1 Mil.
Net Income was 9.71 + 6.261 + -5.494 + 3.559 = $14.0 Mil.
Non Operating Income was 0.078 + 0.061 + 0.406 + 0.078 = $0.6 Mil.
Cash Flow from Operations was -1.41 + 11.324 + 20.68 + -7.029 = $23.6 Mil.
|Accounts Receivable was $13.5 Mil.
Revenue was 57.38 + 49.799 + 51.227 + 38.913 = $197.3 Mil.
Gross Profit was 35.08 + 29.822 + 29.389 + 21.772 = $116.1 Mil.
Total Current Assets was $32.9 Mil.
Total Assets was $184.1 Mil.
Property, Plant and Equipment(Net PPE) was $52.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $11.1 Mil.
Selling, General & Admin. Expense(SGA) was $60.8 Mil.
Total Current Liabilities was $43.8 Mil.
Long-Term Debt was $63.0 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)|
|=||(20.539 / 220.299)||/||(13.464 / 197.319)|
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)|
|=||(32.977 / 197.319)||/||(38.962 / 220.299)|
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 - (36.624 + 49.359) / 232.484)||/||(1 - (32.889 + 52.175) / 184.09)|
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))|
|=||(11.148 / (11.148 + 52.175))||/||(15.964 / (15.964 + 49.359))|
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)|
|=||(79.502 / 220.299)||/||(60.808 / 197.319)|
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)|
|=||((103.103 + 40.759) / 232.484)||/||((63 + 43.827) / 184.09)|
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|
|=||(14.036 - 0.623||-||23.565)||/||232.484|
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 -2.24 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