Southeastern Bank Financial Beneish M-Score Calculation
The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Altman Z-Score) or business trend (Piotroski 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 Southeastern Bank Financial 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 * 0.8373 | + | 0.528 * 1 | + | 0.404 * 1.0014 | + | 0.892 * 1.044 | + | 0.115 * 0.8792 |
| - | 0.172 * SGAI | + | 4.679 * TATA | - | 0.327 * LVGI |
| - | 0.172 * 0.9578 | + | 4.679 * -0.015836 | - | 0.327 * 1.2391 |
| = | -2.75 |
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
| This Year (Sep16) TTM: | Last Year (Sep15) TTM: |
Total Receivables was $5.49 Mil.
Revenue was 19.344 + 19.682 + 19.044 + 18.351 = $76.42 Mil.
Gross Profit was 19.344 + 19.682 + 19.044 + 18.351 = $76.42 Mil.
Total Current Assets was $0.00 Mil.
Total Assets was $1,875.53 Mil.
Property, Plant and Equipment(Net PPE) was $25.93 Mil.
Depreciation, Depletion and Amortization(DDA) was $2.37 Mil.
Selling, General, & Admin. Expense(SGA) was $38.37 Mil.
Total Current Liabilities was $0.00 Mil.
Long-Term Debt & Capital Lease Obligation was $110.00 Mil.
Net Income was 4.771 + 4.5 + 4.696 + 4.634 = $18.60 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.00 Mil.
Cash Flow from Operations was 10.61 + 11.924 + 4.766 + 21.001 = $48.30 Mil.
|
Total Receivables was $6.28 Mil.
Revenue was 18.845 + 17.942 + 17.807 + 18.606 = $73.20 Mil.
Gross Profit was 18.845 + 17.942 + 17.807 + 18.606 = $73.20 Mil.
Total Current Assets was $0.00 Mil.
Total Assets was $1,816.97 Mil.
Property, Plant and Equipment(Net PPE) was $27.66 Mil.
Depreciation, Depletion and Amortization(DDA) was $2.20 Mil.
Selling, General, & Admin. Expense(SGA) was $38.38 Mil.
Total Current Liabilities was $0.00 Mil.
Long-Term Debt & Capital Lease Obligation was $86.00 Mil.
|
1. DSRI = Days Sales in Receivables Index
Measured as the ratio of Revenue in Total 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) |
| = | (5.492 / 76.421) | / | (6.283 / 73.2) |
| = | 0.071865 | / | 0.085833 |
| | = | 0.8373 |
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) |
| = | (73.2 / 73.2) | / | (76.421 / 76.421) |
| = | 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 Property, Plant 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 + 25.934) / 1875.529) | / | (1 - (0 + 27.66) / 1816.968) |
| = | 0.986172 | / | 0.984777 |
| | = | 1.0014 |
4. SGI = Sales Growth Index
Ratio of Revenue 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 |
| = | 76.421 | / | 73.2 |
| | = | 1.044 |
5. DEPI = Depreciation Index
Measured as the ratio of the rate of Depreciation, Depletion and Amortization 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)) |
| = | (2.2 / (2.2 + 27.66)) | / | (2.372 / (2.372 + 25.934)) |
| = | 0.073677 | / | 0.083798 |
| | = | 0.8792 |
Note: If the Depreciation, Depletion and Amortization data is not available, we assume that the depreciation rate is constant and set the Depreciation Index to 1.
6. SGAI = Sales, General and Administrative expenses Index
The ratio of Selling, General, & Admin. Expense(SGA) to Sales 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) |
| = | (38.372 / 76.421) | / | (38.376 / 73.2) |
| = | 0.502113 | / | 0.524262 |
| | = | 0.9578 |
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 in leverage
| LVGI | = | ((LTD_t + CurrentLiabilities_t) / TotalAssets_t) | / | ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1) |
| = | ((110 + 0) / 1875.529) | / | ((86 + 0) / 1816.968) |
| = | 0.05865 | / | 0.047332 |
| | = | 1.2391 |
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 |
| = | (18.601 - 0 | - | 48.301) | / | 1875.529 |
| | = | -0.015836 |
An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator. An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.
Southeastern Bank Financial has a M-score of -2.75 suggests that the company is unlikely to be a manipulator.
Southeastern Bank Financial (Southeastern Bank Financial) Business Description
Traded in Other Exchanges
N/A
Address
Southeastern Bank Financial Corp was incorporated in Georgia in February 1992. It is a bank holding company. The Company is community oriented which along with its subsidiaries offers real estate, commercial and consumer loans and various deposit and other services to individuals, small to medium sized businesses and professionals in its market area. The Company offers a range of lending services, including real estate, commercial and consumer loans to individuals, small to medium-sized businesses and professionals that are located in, or conduct a substantial portion of its business in the its market area. The Company offers a variety of deposit programs to individuals and small to medium-sized businesses and other organizations at interest rates generally consistent with local market conditions. Its services include the origination of residential and commercial real estate loans, construction and development loans, and commercial and consumer loans. The Company also offers a variety of deposit programs, including noninterest-bearing demand, interest checking, money management, savings, and time deposits. The Company's main market area includes Richmond and Columbia Counties in Georgia and Aiken County in South Carolina, all part of the Augusta-Richmond County, GA-SC metropolitan statistical area "MSA". The Company competes as a financial intermediary with other commercial banks, savings and loan associations, credit unions, mortgage banking companies, consumer finance companies, securities brokerages, insurance companies, and money market mutual funds operating in Richmond, Columbia and Clarke Counties in Georgia, Aiken County in South Carolina and elsewhere.
Executives
| Darrell R Rains |
officer: Chief Financial Officer |
P.O. BOX 15367, AUGUSTA GA 30909 |
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