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Tata Motors Ltd (NYSE:TTM)
Beneish M-Score
-1.55 (As of Today)

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.

Tata Motors Ltd has a M-score of -1.55 signals that the company is a manipulator.

TTM' s Beneish M-Score Range Over the Past 10 Years
Min: -170.75   Max: -1.55
Current: -1.55

-170.75
-1.55

During the past 13 years, the highest Beneish M-Score of Tata Motors Ltd was -1.55. The lowest was -170.75. And the median was -2.36.


Definition

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 * 0.9863+0.528 * 0.9997+0.404 * 3.8173+0.892 * 1.0266+0.115 * 0.4991
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2123+4.679 * -0.0245-0.327 * 1.039
=-1.55

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $1,863 Mil.
Revenue was 10042.8532028 + 9968.86962856 + 11192.1801022 + 10865.2482696 = $42,069 Mil.
Gross Profit was 3990.86545812 + 3984.82282894 + 4429.35137664 + 4310.73962855 = $16,716 Mil.
Total Current Assets was $15,915 Mil.
Total Assets was $39,407 Mil.
Property, Plant and Equipment(Net PPE) was $9,092 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,627 Mil.
Selling, General & Admin. Expense(SGA) was $12,261 Mil.
Total Current Liabilities was $16,173 Mil.
Long-Term Debt was $8,103 Mil.
Net Income was 124.166214486 + 332.470582988 + 559.366072216 + 527.431382072 = $1,543 Mil.
Non Operating Income was 29.311776574 + 97.9283585196 + 2349.10129778 + 34.0319056634 = $2,510 Mil.
Cash Flow from Operations was 0 + 0 + 0 + 0 = $0 Mil.
Accounts Receivable was $1,840 Mil.
Revenue was 9468.08439895 + 9611.35543713 + 10815.5408487 + 11085.3316451 = $40,980 Mil.
Gross Profit was 3581.82439203 + 4113.95574537 + 4330.56553645 + 4252.15167023 = $16,278 Mil.
Total Current Assets was $15,802 Mil.
Total Assets was $38,617 Mil.
Property, Plant and Equipment(Net PPE) was $19,118 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,408 Mil.
Selling, General & Admin. Expense(SGA) was $9,852 Mil.
Total Current Liabilities was $14,839 Mil.
Long-Term Debt was $8,056 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(1863.20071709 / 42069.1512032) / (1840.25348098 / 40980.3123299)
=0.044289 / 0.04490579
=0.9863

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.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(16278.4973441 / 40980.3123299) / (16715.7792923 / 42069.1512032)
=0.39722726 / 0.39734054
=0.9997

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (15915.0280752 + 9092.16084228) / 39407.4704184) / (1 - (15801.6419135 + 19118.3374719) / 38616.6409992)
=0.36542009 / 0.09572717
=3.8173

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.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=42069.1512032 / 40980.3123299
=1.0266

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))
=(2408.42579363 / (2408.42579363 + 19118.3374719)) / (2627.11002746 / (2627.11002746 + 9092.16084228))
=0.11188054 / 0.22417009
=0.4991

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)
=(12261.0127978 / 42069.1512032) / (9852.2043413 / 40980.3123299)
=0.29144902 / 0.24041311
=1.2123

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)
=((8103.11809551 + 16172.8847705) / 39407.4704184) / ((8056.36218823 + 14838.9401315) / 38616.6409992)
=0.6160254 / 0.59288695
=1.039

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(1543.43425176 - 2510.37333854 - 0) / 39407.4704184
=-0.0245

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 -1.55 signals that the company is likely to be a manipulator.


Related Terms

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


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Tata Motors Ltd Annual Data

Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14Mar15Mar16
DSRI 0.98371.39210.88151.05920.72520.96031.05940.83781.06571.0111
GMI 1.03820.61811.02591.03840.88151.02820.94140.95440.98160.9692
AQI 1.0471.26240.80520.99361.00580.99251.00710.9630.96780.995
SGI 1.39581.21551.53281.44161.34611.20261.05431.10471.09360.9597
DEPI 1.21021.26890.65290.80480.89570.94640.96780.94160.97920.9297
SGAI 0.97242.17860.44440.91262.61661.01011.08931.02581.00031.0802
LVGI 1.11121.16061.29560.92830.87710.97110.9830.90061.04880.9153
TATA -0.0153-0.054-0.0716-0.1662-0.1167-0.1273-0.1393-0.1798-0.1652-0.1588
M-score -2.18-2.50-2.55-2.78-3.28-2.92-3.07-3.39-3.15-3.26

Tata Motors Ltd Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 1.14460.9863
GMI 0.96520.9997
AQI 0.83023.8173
SGI 0.97951.0266
DEPI 0.90790.4991
SGAI 2.55721.2123
LVGI 0.9621.039
TATA -0.0152-0.0245
M-score -2.79-1.55
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