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Bankrate Inc (NYSE:RATE)
Beneish M-Score
-2.87 (As of Today)

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.

Bankrate Inc has a M-score of -2.87 suggests that the company is not a manipulator.

RATE' s 10-Year Beneish M-Score Range
Min: -4.89   Max: 2.02
Current: -2.87

-4.89
2.02

During the past 13 years, the highest Beneish M-Score of Bankrate Inc was 2.02. The lowest was -4.89. And the median was -2.12.


Definition

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 Bankrate 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 * 1.1773+0.528 * 1.015+0.404 * 0.8753+0.892 * 1.0006+0.115 * 1.0213
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0218+4.679 * -0.082-0.327 * 1.389
=-2.87

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $62.0 Mil.
Revenue was 122.26 + 121.178 + 105.546 + 108.448 = $457.4 Mil.
Gross Profit was 85.245 + 80.654 + 68.074 + 72.409 = $306.4 Mil.
Total Current Assets was $308.9 Mil.
Total Assets was $1,296.8 Mil.
Property, Plant and Equipment(Net PPE) was $12.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $60.1 Mil.
Selling, General & Admin. Expense(SGA) was $184.7 Mil.
Total Current Liabilities was $83.5 Mil.
Long-Term Debt was $297.0 Mil.
Net Income was -3.542 + -7.751 + -0.892 + 2.183 = $-10.0 Mil.
Non Operating Income was 6.24 + -19.317 + 2.949 + 1.149 = $-9.0 Mil.
Cash Flow from Operations was 47.355 + 18.674 + 26.856 + 12.418 = $105.3 Mil.
Accounts Receivable was $52.6 Mil.
Revenue was 93.244 + 116.775 + 122.125 + 125.02 = $457.2 Mil.
Gross Profit was 62.456 + 79.093 + 84.516 + 84.742 = $310.8 Mil.
Total Current Assets was $153.6 Mil.
Total Assets was $1,160.2 Mil.
Property, Plant and Equipment(Net PPE) was $10.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $52.9 Mil.
Selling, General & Admin. Expense(SGA) was $180.6 Mil.
Total Current Liabilities was $51.1 Mil.
Long-Term Debt was $193.9 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(61.962 / 457.432) / (52.598 / 457.164)
=0.1354562 / 0.1150528
=1.1773

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.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(80.654 / 457.164) / (85.245 / 457.432)
=0.67985887 / 0.66978698
=1.015

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (308.924 + 12.93) / 1296.811) / (1 - (153.642 + 10.024) / 1160.15)
=0.75181117 / 0.85892686
=0.8753

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.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=457.432 / 457.164
=1.0006

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))
=(52.854 / (52.854 + 10.024)) / (60.127 / (60.127 + 12.93))
=0.84058017 / 0.82301491
=1.0213

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)
=(184.679 / 457.432) / (180.641 / 457.164)
=0.40372995 / 0.39513391
=1.0218

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)
=((297.021 + 83.461) / 1296.811) / ((193.943 + 51.108) / 1160.15)
=0.29339819 / 0.21122355
=1.389

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(-10.002 - -8.979 - 105.303) / 1296.811
=-0.082

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.

Bankrate Inc has a M-score of -2.87 suggests that the company will not be a manipulator.


Related Terms

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


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Bankrate Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.41261.55571.09041.00470.67860.75321.90150.73681.1773
GMI 1.0251.00981.0780.94131.20821.06540.92430.92741.015
AQI 9.02884.03640.39061.26772.18211.11981.02471.03560.8753
SGI 1.07051.25111.62391.20021.74550.7881.67781.9231.0006
DEPI 1.2520.80510.78140.9710.76880.89941.02771.02440
SGAI 0.98340.41962.16240.91170.8081.35160.65081.23951.0218
LVGI 0.57442.04720.23451.33751.71555.58970.80180.59871.389
TATA 0.1283-0.0815-0.0238-0.0361-0.0851-0.1169-0.0468-0.0394-0.0757
M-score 1.99-1.16-2.13-2.49-2.15-4.93-1.17-2.01-2.96

Bankrate Inc Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 0.73680.6990.78640.70890.80610.99390.98041.26321.1773
GMI 0.92740.91390.90820.92490.97260.99731.03281.04281.015
AQI 1.03560.96930.99711.00770.99250.99150.98320.90350.8753
SGI 1.9231.57821.37181.23211.07770.97880.89490.89691.0006
DEPI 1.02441.00381.02940.9850.98460.99270.99921.00351.0213
SGAI 1.23951.31131.30241.26411.23521.17391.14061.06791.0218
LVGI 0.59870.65080.97680.99690.96131.01951.02021.35641.389
TATA -0.0394-0.047-0.0541-0.0547-0.042-0.0492-0.0619-0.0583-0.082
M-score -2.01-2.46-2.69-2.88-2.83-2.78-2.90-2.75-2.87
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