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Bankrate Inc (NYSE:RATE)
Beneish M-Score
-2.57 (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 -2.57 suggests that the company is not a manipulator.

RATE' s 10-Year Beneish M-Score Range
Min: -4.89   Max: 2.07
Current: -2.57

-4.89
2.07

During the past 13 years, the highest Beneish M-Score of Bankrate Inc was 2.07. The lowest was -4.89. And the median was -2.40.


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 * 1.1006+0.528 * 0.9976+0.404 * 0.9149+0.892 * 1.2041+0.115 * 1.0149
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0396+4.679 * -0.0493-0.327 * 1.2894
=-2.57

* 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 $77.2 Mil.
Revenue was 130.662 + 136.475 + 122.26 + 121.178 = $510.6 Mil.
Gross Profit was 84.168 + 90.18 + 85.245 + 80.654 = $340.2 Mil.
Total Current Assets was $302.0 Mil.
Total Assets was $1,320.0 Mil.
Property, Plant and Equipment(Net PPE) was $13.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $60.4 Mil.
Selling, General & Admin. Expense(SGA) was $215.3 Mil.
Total Current Liabilities was $78.0 Mil.
Long-Term Debt was $297.3 Mil.
Net Income was -2.246 + 4.832 + -3.542 + -7.751 = $-8.7 Mil.
Non Operating Income was -10.318 + 0 + 6.24 + -19.317 = $-23.4 Mil.
Cash Flow from Operations was 8.314 + 5.444 + 47.355 + 18.674 = $79.8 Mil.
Accounts Receivable was $58.2 Mil.
Revenue was 105.546 + 108.448 + 93.244 + 116.775 = $424.0 Mil.
Gross Profit was 68.004 + 72.34 + 62.456 + 79.093 = $281.9 Mil.
Total Current Assets was $186.6 Mil.
Total Assets was $1,179.6 Mil.
Property, Plant and Equipment(Net PPE) was $12.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $57.9 Mil.
Selling, General & Admin. Expense(SGA) was $172.0 Mil.
Total Current Liabilities was $66.0 Mil.
Long-Term Debt was $194.1 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)
=(77.154 / 510.575) / (58.215 / 424.013)
=0.15111198 / 0.13729532
=1.1006

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)
=(90.18 / 424.013) / (84.168 / 510.575)
=0.6648216 / 0.66639965
=0.9976

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 - (301.956 + 13.609) / 1320.008) / (1 - (186.572 + 11.989) / 1179.621)
=0.76093705 / 0.8316739
=0.9149

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
=510.575 / 424.013
=1.2041

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))
=(57.853 / (57.853 + 11.989)) / (60.428 / (60.428 + 13.609))
=0.82834111 / 0.8161865
=1.0149

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)
=(215.335 / 510.575) / (172.01 / 424.013)
=0.42174999 / 0.40567152
=1.0396

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)
=((297.305 + 77.997) / 1320.008) / ((194.125 + 65.989) / 1179.621)
=0.28431797 / 0.22050642
=1.2894

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
=(-8.707 - -23.395 - 79.787) / 1320.008
=-0.0493

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 -2.57 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 1.41261.55571.09041.00470.67860.75321.90150.73680.80611.1773
GMI 1.0251.00981.0780.94131.20821.06540.92430.92740.97261.015
AQI 9.02884.03640.39061.26772.18211.11981.02471.03560.99250.8753
SGI 1.07051.25111.62391.20021.74550.7881.67781.9231.07771.0006
DEPI 1.2520.80510.78140.9710.76880.89941.02771.02440.98461.0213
SGAI 0.98340.41962.16240.91170.8081.35160.65081.23951.23521.0218
LVGI 0.57442.04720.23451.33751.71555.58970.80180.59870.96131.389
TATA 0.1283-0.0815-0.0238-0.0361-0.0851-0.1169-0.0468-0.0394-0.0436-0.0757
M-score 1.99-1.16-2.13-2.49-2.15-4.93-1.17-2.01-2.84-2.84

Bankrate Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.6990.78640.70890.80610.99390.98041.26321.17731.20111.1006
GMI 0.91420.90840.92510.97280.99731.03311.04311.01531.01450.9976
AQI 0.96930.99711.00770.99250.99150.98320.90350.87530.86070.9149
SGI 1.57821.37181.23211.07770.97880.89490.89691.00061.10181.2041
DEPI 1.00381.02940.9850.98460.99270.99921.00351.02131.03751.0149
SGAI 1.31071.30181.26361.23471.17291.13761.06511.01931.00041.0396
LVGI 0.65080.97680.99690.96131.01951.02021.35641.3891.31031.2894
TATA -0.047-0.0538-0.0559-0.0436-0.0498-0.0492-0.0453-0.0687-0.0606-0.0493
M-score -2.46-2.69-2.88-2.84-2.78-2.84-2.69-2.81-2.63-2.57
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