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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.
EchoStar Corp has a M-score of -2.82 suggests that the company is not a manipulator.
During the past 8 years, the highest Beneish M-Score of EchoStar Corp was -2.24. The lowest was -3.29. And the median was -2.87.
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 EchoStar Corp 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 * 1.0027||+||0.528 * 0.9811||+||0.404 * 0.9262||+||0.892 * 1.051||+||0.115 * 1.0532|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9103||+||4.679 * -0.0841||-||0.327 * 0.924|
|This Year (Mar14) TTM:||Last Year (Mar13) TTM:|
|Accounts Receivable was $535 Mil.|
Revenue was 826.023 + 808.087 + 848.908 + 830.003 = $3,313 Mil.
Gross Profit was 295.26 + 270.638 + 266.975 + 275.636 = $1,109 Mil.
Total Current Assets was $2,449 Mil.
Total Assets was $7,239 Mil.
Property, Plant and Equipment(Net PPE) was $3,005 Mil.
Depreciation, Depletion and Amortization(DDA) was $514 Mil.
Selling, General & Admin. Expense(SGA) was $352 Mil.
Total Current Liabilities was $634 Mil.
Long-Term Debt was $2,345 Mil.
Net Income was 12.055 + 4.506 + 4.32 + -9.759 = $11 Mil.
Non Operating Income was -1.187 + 1.324 + 2.775 + 15.137 = $18 Mil.
Cash Flow from Operations was 201.472 + 59.163 + 198.069 + 143.091 = $602 Mil.
|Accounts Receivable was $508 Mil.
Revenue was 795.454 + 786.199 + 764.721 + 806.004 = $3,152 Mil.
Gross Profit was 262.305 + 256.396 + 247.145 + 268.945 = $1,035 Mil.
Total Current Assets was $2,220 Mil.
Total Assets was $6,550 Mil.
Property, Plant and Equipment(Net PPE) was $2,586 Mil.
Depreciation, Depletion and Amortization(DDA) was $470 Mil.
Selling, General & Admin. Expense(SGA) was $368 Mil.
Total Current Liabilities was $520 Mil.
Long-Term Debt was $2,398 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)|
|=||(535.188 / 3313.021)||/||(507.859 / 3152.378)|
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)|
|=||(270.638 / 3152.378)||/||(295.26 / 3313.021)|
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 - (2449.236 + 3004.534) / 7238.592)||/||(1 - (2220.033 + 2586.173) / 6549.952)|
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))|
|=||(469.935 / (469.935 + 2586.173))||/||(513.638 / (513.638 + 3004.534))|
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)|
|=||(351.955 / 3313.021)||/||(367.886 / 3152.378)|
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)|
|=||((2345.199 + 634.482) / 7238.592)||/||((2397.542 + 520.493) / 6549.952)|
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|
|=||(11.122 - 18.049||-||601.795)||/||7238.592|
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.
EchoStar Corp has a M-score of -2.82 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
EchoStar Corp Annual Data
EchoStar Corp Quarterly Data