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Beneish M-Score -0.73 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 8 years, the highest Beneish M-Score of Tesla Motors Inc was -0.37. The lowest was -3.08. And the median was -0.71.
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 Motors 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 * 2.9049||+||0.528 * 0.822||+||0.404 * 0.75||+||0.892 * 1.5885||+||0.115 * 1.0542|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.3308||+||4.679 * -0.0408||-||0.327 * 1.2921|
* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.
|This Year (Dec14) TTM:||Last Year (Dec13) TTM:|
|Accounts Receivable was $227 Mil.|
Revenue was 956.661 + 851.804 + 769.349 + 620.542 = $3,198 Mil.
Gross Profit was 261.697 + 251.851 + 212.995 + 155.128 = $882 Mil.
Total Current Assets was $3,199 Mil.
Total Assets was $5,849 Mil.
Property, Plant and Equipment(Net PPE) was $2,596 Mil.
Depreciation, Depletion and Amortization(DDA) was $232 Mil.
Selling, General & Admin. Expense(SGA) was $604 Mil.
Total Current Liabilities was $2,107 Mil.
Long-Term Debt was $1,877 Mil.
Net Income was -107.629 + -74.708 + -61.9 + -49.8 = $-294 Mil.
Non Operating Income was -0.588 + -3.09 + -1.226 + 6.718 = $2 Mil.
Cash Flow from Operations was -86.402 + -27.996 + -3.579 + 60.64 = $-57 Mil.
|Accounts Receivable was $49 Mil.
Revenue was 615.219 + 431.346 + 405.139 + 561.792 = $2,013 Mil.
Gross Profit was 156.589 + 102.868 + 100.483 + 96.32 = $456 Mil.
Total Current Assets was $1,266 Mil.
Total Assets was $2,417 Mil.
Property, Plant and Equipment(Net PPE) was $1,121 Mil.
Depreciation, Depletion and Amortization(DDA) was $106 Mil.
Selling, General & Admin. Expense(SGA) was $286 Mil.
Total Current Liabilities was $675 Mil.
Long-Term Debt was $599 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)|
|=||(226.604 / 3198.356)||/||(49.109 / 2013.496)|
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)|
|=||(251.851 / 2013.496)||/||(261.697 / 3198.356)|
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 - (3198.657 + 2596.011) / 5849.251)||/||(1 - (1265.939 + 1120.919) / 2416.93)|
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))|
|=||(106.083 / (106.083 + 1120.919))||/||(231.931 / (231.931 + 2596.011))|
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)|
|=||(603.659 / 3198.356)||/||(285.568 / 2013.496)|
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)|
|=||((1876.981 + 2107.166) / 5849.251)||/||((598.974 + 675.16) / 2416.93)|
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|
|=||(-294.037 - 1.814||-||-57.337)||/||5849.251|
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 Motors Inc has a M-score of -0.73 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 Motors Inc Annual Data
Tesla Motors Inc Quarterly Data