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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.
Bankrate Inc has a M-score of -2.87 suggests that the company is not a manipulator.
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.
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|
|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
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)|
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)|
|=||(80.654 / 457.164)||/||(85.245 / 457.432)|
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 - (308.924 + 12.93) / 1296.811)||/||(1 - (153.642 + 10.024) / 1160.15)|
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))|
|=||(52.854 / (52.854 + 10.024))||/||(60.127 / (60.127 + 12.93))|
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)|
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)|
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|
|=||(-10.002 - -8.979||-||105.303)||/||1296.811|
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.
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
Bankrate Inc Annual Data
Bankrate Inc Quarterly Data