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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 10 years, the highest Beneish M-Score of Data Group Ltd was -2.14. The lowest was -4.51. And the median was -2.93.
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 Data Group Ltd 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 * 0.9015||+||0.528 * 1.0576||+||0.404 * 0.7547||+||0.892 * 0.965||+||0.115 * 1.1473|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0059||+||4.679 * -0.2966||-||0.327 * 1.2225|
|This Year (Sep15) TTM:||Last Year (Sep14) TTM:|
|Accounts Receivable was C$32.8 Mil.|
Revenue was 74.116 + 73.447 + 76.002 + 80.371 = C$303.9 Mil.
Gross Profit was 18.386 + 15.626 + 17.285 + 18.744 = C$70.0 Mil.
Total Current Assets was C$80.6 Mil.
Total Assets was C$138.1 Mil.
Property, Plant and Equipment(Net PPE) was C$15.3 Mil.
Depreciation, Depletion and Amortization(DDA) was C$6.7 Mil.
Selling, General & Admin. Expense(SGA) was C$55.9 Mil.
Total Current Liabilities was C$94.0 Mil.
Long-Term Debt was C$43.5 Mil.
Net Income was -1.763 + -29.683 + -1.131 + 1.58 = C$-31.0 Mil.
Non Operating Income was -0.135 + -0.134 + -0.036 + -2.876 = C$-3.2 Mil.
Cash Flow from Operations was 1.113 + 2.825 + 4.7 + 4.514 = C$13.2 Mil.
|Accounts Receivable was C$37.7 Mil.
Revenue was 78.128 + 76.773 + 77.903 + 82.147 = C$315.0 Mil.
Gross Profit was 19.228 + 17.837 + 18.803 + 20.89 = C$76.8 Mil.
Total Current Assets was C$83.1 Mil.
Total Assets was C$165.2 Mil.
Property, Plant and Equipment(Net PPE) was C$15.3 Mil.
Depreciation, Depletion and Amortization(DDA) was C$8.2 Mil.
Selling, General & Admin. Expense(SGA) was C$57.5 Mil.
Total Current Liabilities was C$48.1 Mil.
Long-Term Debt was C$86.4 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)|
|=||(32.835 / 303.936)||/||(37.743 / 314.951)|
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)|
|=||(15.626 / 314.951)||/||(18.386 / 303.936)|
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 - (80.629 + 15.347) / 138.106)||/||(1 - (83.112 + 15.295) / 165.167)|
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))|
|=||(8.164 / (8.164 + 15.295))||/||(6.682 / (6.682 + 15.347))|
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)|
|=||(55.851 / 303.936)||/||(57.534 / 314.951)|
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)|
|=||((43.496 + 94.003) / 138.106)||/||((86.442 + 48.066) / 165.167)|
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|
|=||(-30.997 - -3.181||-||13.152)||/||138.106|
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.
Data Group Ltd has a M-score of -4.12 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
Data Group Ltd Annual Data
Data Group Ltd Quarterly Data