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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 -2.83. 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 * 1.1268||+||0.528 * 1.0948||+||0.404 * 1.015||+||0.892 * 0.915||+||0.115 * 0.9317|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.1153||+||4.679 * -0.0341||-||0.327 * 0.9045|
|This Year (Jun16) TTM:||Last Year (Jun15) TTM:|
|Accounts Receivable was $57.2 Mil.|
Revenue was 63.396 + 72.344 + 74.427 + 69.934 = $280.1 Mil.
Gross Profit was 26.114 + 32.095 + 35.129 + 33.354 = $126.7 Mil.
Total Current Assets was $191.4 Mil.
Total Assets was $457.0 Mil.
Property, Plant and Equipment(Net PPE) was $42.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $17.6 Mil.
Selling, General & Admin. Expense(SGA) was $80.0 Mil.
Total Current Liabilities was $49.1 Mil.
Long-Term Debt was $75.1 Mil.
Net Income was 2.526 + 3.204 + 8.48 + 6.896 = $21.1 Mil.
Non Operating Income was 0.277 + -0.012 + -0.377 + -0.119 = $-0.2 Mil.
Cash Flow from Operations was -7.034 + 12.872 + 23.449 + 7.62 = $36.9 Mil.
|Accounts Receivable was $55.4 Mil.
Revenue was 65.223 + 74.256 + 87.622 + 79.033 = $306.1 Mil.
Gross Profit was 30.737 + 34.105 + 45.533 + 41.221 = $151.6 Mil.
Total Current Assets was $196.0 Mil.
Total Assets was $452.6 Mil.
Property, Plant and Equipment(Net PPE) was $38.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $14.6 Mil.
Selling, General & Admin. Expense(SGA) was $78.4 Mil.
Total Current Liabilities was $44.9 Mil.
Long-Term Debt was $91.1 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)|
|=||(57.151 / 280.101)||/||(55.435 / 306.134)|
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)|
|=||(151.596 / 306.134)||/||(126.692 / 280.101)|
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 - (191.403 + 41.983) / 456.971)||/||(1 - (196.035 + 38.383) / 452.591)|
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))|
|=||(14.597 / (14.597 + 38.383))||/||(17.627 / (17.627 + 41.983))|
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)|
|=||(79.988 / 280.101)||/||(78.383 / 306.134)|
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)|
|=||((75.144 + 49.116) / 456.971)||/||((91.125 + 44.933) / 452.591)|
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|
|=||(21.106 - -0.231||-||36.907)||/||456.971|
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 -2.54 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