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Beneish M-Score 0.23 higher than -2.22, which implies that it might have manipulated its financial results.
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 10 years, the highest Beneish M-Score of Tesla Inc was 0.23. The lowest was -3.10. And the median was -0.73.
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 Tesla 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 * 1.7408||+||0.528 * 1.0944||+||0.404 * 1.1511||+||0.892 * 1.5653||+||0.115 * 0.7571|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9729||+||4.679 * -0.0906||-||0.327 * 0.8538|
|This Year (Sep16) TTM:||Last Year (Sep15) TTM:|
|Accounts Receivable was $327 Mil.|
Revenue was 2298.436 + 1270.017 + 1147.048 + 1214.38 = $5,930 Mil.
Gross Profit was 636.735 + 274.776 + 252.468 + 218.564 = $1,383 Mil.
Total Current Assets was $5,172 Mil.
Total Assets was $12,592 Mil.
Property, Plant and Equipment(Net PPE) was $7,258 Mil.
Depreciation, Depletion and Amortization(DDA) was $764 Mil.
Selling, General & Admin. Expense(SGA) was $1,265 Mil.
Total Current Liabilities was $4,082 Mil.
Long-Term Debt was $2,443 Mil.
Net Income was 21.878 + -293.188 + -282.267 + -320.397 = $-874 Mil.
Non Operating Income was -11.756 + -7.373 + 9.177 + -17.149 = $-27 Mil.
Cash Flow from Operations was 423.649 + 150.336 + -249.605 + -29.849 = $295 Mil.
|Accounts Receivable was $120 Mil.
Revenue was 936.789 + 954.976 + 939.88 + 956.661 = $3,788 Mil.
Gross Profit was 231.496 + 213.37 + 260.073 + 261.697 = $967 Mil.
Total Current Assets was $2,999 Mil.
Total Assets was $7,547 Mil.
Property, Plant and Equipment(Net PPE) was $4,465 Mil.
Depreciation, Depletion and Amortization(DDA) was $347 Mil.
Selling, General & Admin. Expense(SGA) was $831 Mil.
Total Current Liabilities was $2,554 Mil.
Long-Term Debt was $2,028 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)|
|=||(326.895 / 5929.881)||/||(119.964 / 3788.306)|
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)|
|=||(966.636 / 3788.306)||/||(1382.543 / 5929.881)|
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 - (5172.412 + 7258.345) / 12592.397)||/||(1 - (2998.795 + 4464.536) / 7547.497)|
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))|
|=||(346.843 / (346.843 + 4464.536))||/||(763.883 / (763.883 + 7258.345))|
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)|
|=||(1264.827 / 5929.881)||/||(830.548 / 3788.306)|
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)|
|=||((2443.42 + 4082.39) / 12592.397)||/||((2027.575 + 2553.771) / 7547.497)|
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|
|=||(-873.974 - -27.101||-||294.531)||/||12592.397|
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.
Tesla Inc has a M-score of -1.58 signals that the company is likely to 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
Tesla Inc Annual Data
Tesla Inc Quarterly Data