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River Valley Bancorp (NAS:RIVR)
Beneish M-Score
-2.42 (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.

River Valley Bancorp has a M-score of -2.42 suggests that the company is not a manipulator.

RIVR' s Beneish M-Score Range Over the Past 10 Years
Min: -3.23   Max: -1.87
Current: -2.42

-3.23
-1.87

During the past 13 years, the highest Beneish M-Score of River Valley Bancorp was -1.87. The lowest was -3.23. And the median was -2.50.


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 River Valley Bancorp 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 * 1.027+0.528 * 1+0.404 * 1.001+0.892 * 1.0888+0.115 * 1.0137
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9312+4.679 * -0.0073-0.327 * 1.0677
=-2.42

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $2.56 Mil.
Revenue was 5.234 + 5.467 + 5.509 + 5.534 = $21.74 Mil.
Gross Profit was 5.234 + 5.467 + 5.509 + 5.534 = $21.74 Mil.
Total Current Assets was $0.00 Mil.
Total Assets was $513.70 Mil.
Property, Plant and Equipment(Net PPE) was $9.51 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.77 Mil.
Selling, General & Admin. Expense(SGA) was $9.08 Mil.
Total Current Liabilities was $0.00 Mil.
Long-Term Debt was $50.97 Mil.
Net Income was 1.287 + 1.548 + 1.453 + 1.463 = $5.75 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.00 Mil.
Cash Flow from Operations was 2.533 + 2.384 + 2.622 + 1.946 = $9.49 Mil.
Accounts Receivable was $2.29 Mil.
Revenue was 5.107 + 4.881 + 4.935 + 5.047 = $19.97 Mil.
Gross Profit was 5.107 + 4.881 + 4.935 + 5.047 = $19.97 Mil.
Total Current Assets was $0.00 Mil.
Total Assets was $504.49 Mil.
Property, Plant and Equipment(Net PPE) was $9.85 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.81 Mil.
Selling, General & Admin. Expense(SGA) was $8.96 Mil.
Total Current Liabilities was $0.00 Mil.
Long-Term Debt was $46.88 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)
=(2.563 / 21.744) / (2.292 / 19.97)
=0.1178716 / 0.11477216
=1.027

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)
=(5.467 / 19.97) / (5.234 / 21.744)
=1 / 1
=1

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 - (0 + 9.514) / 513.702) / (1 - (0 + 9.85) / 504.485)
=0.98147953 / 0.98047514
=1.001

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
=21.744 / 19.97
=1.0888

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))
=(0.809 / (0.809 + 9.85)) / (0.77 / (0.77 + 9.514))
=0.0758983 / 0.07487359
=1.0137

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)
=(9.083 / 21.744) / (8.958 / 19.97)
=0.41772443 / 0.44857286
=0.9312

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)
=((50.967 + 0) / 513.702) / ((46.881 + 0) / 504.485)
=0.09921511 / 0.09292843
=1.0677

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
=(5.751 - 0 - 9.485) / 513.702
=-0.0073

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.

River Valley Bancorp has a M-score of -2.42 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.

River Valley Bancorp Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.16250.94940.8080.91290.81361.04520.93580.87351.06721
GMI 1111111111
AQI 1.00211.00111.00111.00170.99831.00070.99681.00081.00331
SGI 0.97461.08131.12971.10751.08570.97781.2271.08791.02871
DEPI 1.1871.05091.23281.24940.9830.85751.17920.8680.87041
SGAI 1.05450.99231.1150.89491.0631.02320.89471.0721.0431
LVGI 0.9451.04960.89420.83350.77510.95070.65560.97930.96681
TATA -0.0047-0.0009-0.0059-0.0024-0.0075-0.0101-0.003-0.0044-0.0053-0.0053
M-score -2.34-2.47-2.53-2.37-2.55-2.51-2.20-2.56-2.43-2.50

River Valley Bancorp Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 0.8330.87341.00730.8821.03211.06720.99991.15631.0270
GMI 1111111111
AQI 0.99741.000811.00221.00221.00331.00361.0021.0011.0194
SGI 1.29171.0881.03910.97140.95551.02871.05421.09791.08881.0532
DEPI 1.17380.8680.9060.86720.88240.87040.86980.9691.01370.0774
SGAI 0.9231.07171.10241.15971.14791.04331.00940.94980.93120.7395
LVGI 0.79780.97930.85690.84140.75720.96681.30921.21831.06770.9866
TATA -0.0045-0.0044-0.0045-0.0036-0.0045-0.0053-0.0049-0.0063-0.0073-0.0039
M-score -2.30-2.56-2.44-2.62-2.47-2.43-2.57-2.34-2.42-3.42
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