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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 10 years, the highest Beneish M-Score of Sandstorm Gold Ltd was 181.76. The lowest was -7.81. And the median was -2.00.
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 Sandstorm Gold Ltd 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 * 2.1354||+||0.528 * 0.4327||+||0.404 * 1.0658||+||0.892 * 1.0087||+||0.115 * 1.6868|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.1542||+||4.679 * -0.0582||-||0.327 * 0.8656|
|This Year (Sep16) TTM:||Last Year (Sep15) TTM:|
|Accounts Receivable was $8.32 Mil.|
Revenue was 16.815 + 15.709 + 13.384 + 9.863 = $55.77 Mil.
Gross Profit was 6.279 + 5.245 + 5.115 + -0.683 = $15.96 Mil.
Total Current Assets was $18.37 Mil.
Total Assets was $540.42 Mil.
Property, Plant and Equipment(Net PPE) was $411.33 Mil.
Depreciation, Depletion and Amortization(DDA) was $28.80 Mil.
Selling, General & Admin. Expense(SGA) was $10.23 Mil.
Total Current Liabilities was $4.43 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was 6.915 + 5.199 + 13.159 + -24.959 = $0.31 Mil.
Non Operating Income was 4.638 + 6.071 + 12.044 + -24.919 = $-2.17 Mil.
Cash Flow from Operations was 10.313 + 8.935 + 9.685 + 4.988 = $33.92 Mil.
|Accounts Receivable was $3.86 Mil.
Revenue was 12.086 + 15.429 + 15.285 + 12.488 = $55.29 Mil.
Gross Profit was 0.709 + 1.291 + 2.468 + 2.376 = $6.84 Mil.
Total Current Assets was $50.37 Mil.
Total Assets was $408.17 Mil.
Property, Plant and Equipment(Net PPE) was $279.33 Mil.
Depreciation, Depletion and Amortization(DDA) was $34.65 Mil.
Selling, General & Admin. Expense(SGA) was $8.79 Mil.
Total Current Liabilities was $3.87 Mil.
Long-Term Debt was $0.00 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)|
|=||(8.319 / 55.771)||/||(3.862 / 55.288)|
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)|
|=||(6.844 / 55.288)||/||(15.956 / 55.771)|
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 - (18.365 + 411.327) / 540.419)||/||(1 - (50.37 + 279.333) / 408.17)|
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))|
|=||(34.653 / (34.653 + 279.333))||/||(28.797 / (28.797 + 411.327))|
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)|
|=||(10.232 / 55.771)||/||(8.788 / 55.288)|
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)|
|=||((0 + 4.434) / 540.419)||/||((0 + 3.869) / 408.17)|
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|
|=||(0.314 - -2.166||-||33.921)||/||540.419|
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.
Sandstorm Gold Ltd has a M-score of -1.88 signals that the company is likely to 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
Sandstorm Gold Ltd Annual Data
Sandstorm Gold Ltd Quarterly Data