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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 Portland General Electric Co was 0.43. The lowest was -3.80. And the median was -2.80.
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 Portland General Electric Co 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 * 1.0532||+||0.528 * 0.9565||+||0.404 * 0.918||+||0.892 * 0.9995||+||0.115 * 1.0105|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0212||+||4.679 * -0.0561||-||0.327 * 1.003|
|This Year (Sep16) TTM:||Last Year (Sep15) TTM:|
|Accounts Receivable was $140 Mil.|
Revenue was 484 + 428 + 487 + 499 = $1,898 Mil.
Gross Profit was 235 + 238 + 272 + 254 = $999 Mil.
Total Current Assets was $476 Mil.
Total Assets was $7,455 Mil.
Property, Plant and Equipment(Net PPE) was $6,340 Mil.
Depreciation, Depletion and Amortization(DDA) was $322 Mil.
Selling, General & Admin. Expense(SGA) was $247 Mil.
Total Current Liabilities was $448 Mil.
Long-Term Debt was $2,325 Mil.
Net Income was 34 + 37 + 61 + 51 = $183 Mil.
Non Operating Income was 4 + 9 + 6 + 7 = $26 Mil.
Cash Flow from Operations was 159 + 177 + 161 + 78 = $575 Mil.
|Accounts Receivable was $133 Mil.
Revenue was 476 + 450 + 473 + 500 = $1,899 Mil.
Gross Profit was 231 + 236 + 250 + 239 = $956 Mil.
Total Current Assets was $605 Mil.
Total Assets was $7,197 Mil.
Property, Plant and Equipment(Net PPE) was $5,920 Mil.
Depreciation, Depletion and Amortization(DDA) was $304 Mil.
Selling, General & Admin. Expense(SGA) was $242 Mil.
Total Current Liabilities was $465 Mil.
Long-Term Debt was $2,204 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)|
|=||(140 / 1898)||/||(133 / 1899)|
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)|
|=||(956 / 1899)||/||(999 / 1898)|
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 - (476 + 6340) / 7455)||/||(1 - (605 + 5920) / 7197)|
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))|
|=||(304 / (304 + 5920))||/||(322 / (322 + 6340))|
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)|
|=||(247 / 1898)||/||(242 / 1899)|
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)|
|=||((2325 + 448) / 7455)||/||((2204 + 465) / 7197)|
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|
|=||(183 - 26||-||575)||/||7455|
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.
Portland General Electric Co has a M-score of -2.75 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
Portland General Electric Co Annual Data
Portland General Electric Co Quarterly Data