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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.
Stoneridge Inc has a M-score of -2.85 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Stoneridge Inc was -1.70. The lowest was -5.18. And the median was -2.67.
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 Stoneridge 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 * 0.5707||+||0.528 * 1.2648||+||0.404 * 0.8536||+||0.892 * 1.2995||+||0.115 * 0.9703|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.8614||+||4.679 * -0.0734||-||0.327 * 1.0012|
|This Year (Sep14) TTM:||Last Year (Sep13) TTM:|
|Accounts Receivable was $112.0 Mil.|
Revenue was 170.338 + 162.099 + 236.389 + 457.579 = $1,026.4 Mil.
Gross Profit was 49.55 + 48.285 + 54.789 + 70.709 = $223.3 Mil.
Total Current Assets was $321.8 Mil.
Total Assets was $511.7 Mil.
Property, Plant and Equipment(Net PPE) was $85.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $26.1 Mil.
Selling, General & Admin. Expense(SGA) was $194.9 Mil.
Total Current Liabilities was $186.8 Mil.
Long-Term Debt was $109.4 Mil.
Net Income was -0.13 + -21.892 + 1.468 + 0.204 = $-20.4 Mil.
Non Operating Income was -0.738 + -0.186 + -1.708 + -0.528 = $-3.2 Mil.
Cash Flow from Operations was 6.213 + 9.132 + -16.191 + 21.24 = $20.4 Mil.
|Accounts Receivable was $151.0 Mil.
Revenue was 161.556 + 169.833 + 235.71 + 222.725 = $789.8 Mil.
Gross Profit was 49.729 + 54.303 + 58.729 + 54.609 = $217.4 Mil.
Total Current Assets was $345.7 Mil.
Total Assets was $603.6 Mil.
Property, Plant and Equipment(Net PPE) was $113.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $33.4 Mil.
Selling, General & Admin. Expense(SGA) was $174.1 Mil.
Total Current Liabilities was $161.4 Mil.
Long-Term Debt was $187.5 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)|
|=||(111.984 / 1026.405)||/||(150.988 / 789.824)|
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)|
|=||(48.285 / 789.824)||/||(49.55 / 1026.405)|
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 - (321.842 + 85.02) / 511.736)||/||(1 - (345.73 + 112.953) / 603.604)|
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))|
|=||(33.355 / (33.355 + 112.953))||/||(26.111 / (26.111 + 85.02))|
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)|
|=||(194.87 / 1026.405)||/||(174.076 / 789.824)|
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)|
|=||((109.352 + 186.78) / 511.736)||/||((187.452 + 161.434) / 603.604)|
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|
|=||(-20.35 - -3.16||-||20.394)||/||511.736|
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.
Stoneridge Inc has a M-score of -2.85 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
Stoneridge Inc Annual Data
Stoneridge Inc Quarterly Data