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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 13 years, the highest Beneish M-Score of Tata Motors Ltd was -2.56. The lowest was -170.75. And the median was -2.64.
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 Tata Motors 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 * 0.5982||+||0.528 * 0.9408||+||0.404 * 2.259||+||0.892 * 1.1677||+||0.115 * 0.5845|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 3.0411||+||4.679 * -0.1808||-||0.327 * 0.759|
|This Year (Sep14) TTM:||Last Year (Sep13) TTM:|
|Accounts Receivable was $1,218 Mil.|
Revenue was 7830.61889251 + 9057.52961083 + 15734.2375415 + 8720.1309329 = $41,343 Mil.
Gross Profit was 3100.9771987 + 3475.46531303 + 5945.42524917 + 3325.69558101 = $15,848 Mil.
Total Current Assets was $11,886 Mil.
Total Assets was $26,907 Mil.
Property, Plant and Equipment(Net PPE) was $6,067 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,936 Mil.
Selling, General & Admin. Expense(SGA) was $11,231 Mil.
Total Current Liabilities was $9,990 Mil.
Long-Term Debt was $3,059 Mil.
Net Income was 732.899022801 + 1172.58883249 + -195.559800664 + 1013.09328969 = $2,723 Mil.
Non Operating Income was -1403.90879479 + -802.030456853 + 2296.78239203 + 184.942716858 = $276 Mil.
Cash Flow from Operations was 1936.48208469 + 1049.06937394 + 2772.1179402 + 1553.19148936 = $7,311 Mil.
|Accounts Receivable was $1,744 Mil.
Revenue was 8888.86168521 + 7886.05263158 + 10216.5641026 + 8413.36025848 = $35,405 Mil.
Gross Profit was 3478.60413355 + 3017.08823529 + 3798.73001508 + 2473.13085622 = $12,768 Mil.
Total Current Assets was $13,197 Mil.
Total Assets was $31,674 Mil.
Property, Plant and Equipment(Net PPE) was $13,811 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,274 Mil.
Selling, General & Admin. Expense(SGA) was $3,163 Mil.
Total Current Liabilities was $13,922 Mil.
Long-Term Debt was $6,317 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)|
|=||(1218.24104235 / 41342.5169778)||/||(1744.09062003 / 35404.8386778)|
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)|
|=||(3475.46531303 / 35404.8386778)||/||(3100.9771987 / 41342.5169778)|
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 - (11885.9934853 + 6066.7752443) / 26907.1661238)||/||(1 - (13196.8219396 + 13810.8505564) / 31673.8473768)|
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))|
|=||(2274.07298525 / (2274.07298525 + 13810.8505564))||/||(1935.66325774 / (1935.66325774 + 6066.7752443))|
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)|
|=||(11231.2620154 / 41342.5169778)||/||(3162.68885715 / 35404.8386778)|
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)|
|=||((3058.63192182 + 9990.22801303) / 26907.1661238)||/||((6317.20826709 + 13921.8918919) / 31673.8473768)|
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|
|=||(2723.02134431 - 275.785857243||-||7310.86088819)||/||26907.1661238|
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.
Tata Motors Ltd has a M-score of -3.39 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
Tata Motors Ltd Annual Data
Tata Motors Ltd Quarterly Data