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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 -2.42. The lowest was -2.68. 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 * 1.0593||+||0.528 * 1.0764||+||0.404 * 1.0498||+||0.892 * 0.9136||+||0.115 * 0.9793|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.1495||+||4.679 * -0.0517||-||0.327 * 0.9024|
|This Year (Mar16) TTM:||Last Year (Mar15) TTM:|
|Accounts Receivable was $58.5 Mil.|
Revenue was 72.344 + 74.427 + 69.934 + 65.223 = $281.9 Mil.
Gross Profit was 32.095 + 35.129 + 33.354 + 30.737 = $131.3 Mil.
Total Current Assets was $199.8 Mil.
Total Assets was $468.7 Mil.
Property, Plant and Equipment(Net PPE) was $41.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $17.4 Mil.
Selling, General & Admin. Expense(SGA) was $80.7 Mil.
Total Current Liabilities was $57.6 Mil.
Long-Term Debt was $80.1 Mil.
Net Income was 3.204 + 8.48 + 6.896 + 4.429 = $23.0 Mil.
Non Operating Income was -0.012 + -0.377 + -0.119 + -0.168 = $-0.7 Mil.
Cash Flow from Operations was 12.872 + 23.449 + 7.62 + 3.979 = $47.9 Mil.
|Accounts Receivable was $60.4 Mil.
Revenue was 74.256 + 87.622 + 79.033 + 67.667 = $308.6 Mil.
Gross Profit was 34.105 + 45.533 + 41.221 + 33.845 = $154.7 Mil.
Total Current Assets was $207.2 Mil.
Total Assets was $449.8 Mil.
Property, Plant and Equipment(Net PPE) was $34.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $14.1 Mil.
Selling, General & Admin. Expense(SGA) was $76.9 Mil.
Total Current Liabilities was $53.1 Mil.
Long-Term Debt was $93.3 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)|
|=||(58.493 / 281.928)||/||(60.441 / 308.578)|
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)|
|=||(154.704 / 308.578)||/||(131.315 / 281.928)|
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 - (199.753 + 41.617) / 468.677)||/||(1 - (207.155 + 34.824) / 449.757)|
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))|
|=||(14.143 / (14.143 + 34.824))||/||(17.409 / (17.409 + 41.617))|
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)|
|=||(80.729 / 281.928)||/||(76.868 / 308.578)|
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)|
|=||((80.112 + 57.571) / 468.677)||/||((93.283 + 53.138) / 449.757)|
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|
|=||(23.009 - -0.676||-||47.92)||/||468.677|
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 -2.68 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