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Beneish M-Score 0.53 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 0.53. The lowest was -3.10. And the median was -0.74.
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 * 1.7075||+||0.528 * 0.9991||+||0.404 * 5.3374||+||0.892 * 1.7301||+||0.115 * 1.2696|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.8976||+||4.679 * -0.0292||-||0.327 * 0.8613|
|This Year (Dec16) TTM:||Last Year (Dec15) TTM:|
|Accounts Receivable was $499 Mil.|
Revenue was 2284.631 + 2298.436 + 1270.017 + 1147.048 = $7,000 Mil.
Gross Profit was 435.278 + 636.735 + 274.776 + 252.468 = $1,599 Mil.
Total Current Assets was $6,260 Mil.
Total Assets was $22,664 Mil.
Property, Plant and Equipment(Net PPE) was $15,037 Mil.
Depreciation, Depletion and Amortization(DDA) was $947 Mil.
Selling, General & Admin. Expense(SGA) was $1,432 Mil.
Total Current Liabilities was $5,827 Mil.
Long-Term Debt was $5,978 Mil.
Net Income was -121.337 + 21.878 + -293.188 + -282.267 = $-675 Mil.
Non Operating Income was 121.224 + -11.756 + -7.373 + 9.177 = $111 Mil.
Cash Flow from Operations was -448.209 + 423.649 + 150.336 + -249.605 = $-124 Mil.
|Accounts Receivable was $169 Mil.
Revenue was 1214.38 + 936.789 + 954.976 + 939.88 = $4,046 Mil.
Gross Profit was 218.564 + 231.496 + 213.37 + 260.073 = $924 Mil.
Total Current Assets was $2,782 Mil.
Total Assets was $8,068 Mil.
Property, Plant and Equipment(Net PPE) was $5,195 Mil.
Depreciation, Depletion and Amortization(DDA) was $423 Mil.
Selling, General & Admin. Expense(SGA) was $922 Mil.
Total Current Liabilities was $2,811 Mil.
Long-Term Debt was $2,068 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)|
|=||(499.142 / 7000.132)||/||(168.965 / 4046.025)|
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)|
|=||(923.503 / 4046.025)||/||(1599.257 / 7000.132)|
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 - (6259.796 + 15036.917) / 22664.076)||/||(1 - (2782.006 + 5194.737) / 8067.939)|
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))|
|=||(422.59 / (422.59 + 5194.737))||/||(947.099 / (947.099 + 15036.917))|
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)|
|=||(1432.189 / 7000.132)||/||(922.232 / 4046.025)|
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)|
|=||((5978.284 + 5827.005) / 22664.076)||/||((2068.378 + 2811.035) / 8067.939)|
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|
|=||(-674.914 - 111.272||-||-123.829)||/||22664.076|
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 0.53 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