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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 7 years, the highest Beneish M-Score of Thermon Group Holdings Inc was -2.16. The lowest was -2.78. And the median was -2.54.
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 Thermon Group Holdings 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 * 1.012||+||0.528 * 1.1041||+||0.404 * 0.9491||+||0.892 * 0.9392||+||0.115 * 0.9268|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.1493||+||4.679 * -0.0446||-||0.327 * 0.8625|
* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.
|This Year (Sep16) TTM:||Last Year (Sep15) TTM:|
|Accounts Receivable was $57.2 Mil.|
Revenue was 68.812 + 63.396 + 72.344 + 74.427 = $279.0 Mil.
Gross Profit was 28.924 + 26.114 + 32.095 + 35.129 = $122.3 Mil.
Total Current Assets was $192.7 Mil.
Total Assets was $454.7 Mil.
Property, Plant and Equipment(Net PPE) was $42.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $17.8 Mil.
Selling, General & Admin. Expense(SGA) was $62.1 Mil.
Total Current Liabilities was $48.7 Mil.
Long-Term Debt was $70.2 Mil.
Net Income was 3.506 + 2.526 + 3.204 + 8.48 = $17.7 Mil.
Non Operating Income was -0.427 + 0.277 + -0.012 + -0.377 = $-0.5 Mil.
Cash Flow from Operations was 9.254 + -7.034 + 12.872 + 23.449 = $38.5 Mil.
|Accounts Receivable was $60.2 Mil.
Revenue was 69.934 + 65.223 + 74.256 + 87.622 = $297.0 Mil.
Gross Profit was 33.354 + 30.737 + 34.105 + 45.533 = $143.7 Mil.
Total Current Assets was $185.1 Mil.
Total Assets was $459.4 Mil.
Property, Plant and Equipment(Net PPE) was $40.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $15.3 Mil.
Selling, General & Admin. Expense(SGA) was $57.5 Mil.
Total Current Liabilities was $51.5 Mil.
Long-Term Debt was $87.8 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)|
|=||(57.248 / 278.979)||/||(60.229 / 297.035)|
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)|
|=||(143.729 / 297.035)||/||(122.262 / 278.979)|
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 - (192.738 + 41.978) / 454.66)||/||(1 - (185.091 + 40.144) / 459.388)|
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))|
|=||(15.333 / (15.333 + 40.144))||/||(17.839 / (17.839 + 41.978))|
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)|
|=||(62.099 / 278.979)||/||(57.531 / 297.035)|
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)|
|=||((70.175 + 48.69) / 454.66)||/||((87.75 + 51.505) / 459.388)|
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|
|=||(17.716 - -0.539||-||38.541)||/||454.66|
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.
Thermon Group Holdings Inc has a M-score of -2.69 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
Thermon Group Holdings Inc Annual Data
Thermon Group Holdings Inc Quarterly Data