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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 -1.67. The lowest was -170.75. And the median was -2.98.
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 * 1.1514||+||0.528 * 0.959||+||0.404 * 0.8302||+||0.892 * 0.9737||+||0.115 * 0.6122|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 2.577||+||4.679 * -0.1638||-||0.327 * 0.962|
|This Year (Sep15) TTM:||Last Year (Sep14) TTM:|
|Accounts Receivable was $1,840 Mil.|
Revenue was 9267.23109963 + 9567.05220528 + 10815.5408487 + 11085.3316451 = $40,735 Mil.
Gross Profit was 3633.76139357 + 4069.65251353 + 4330.56553645 + 4252.15167023 = $16,286 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 $2,752 Mil.
Selling, General & Admin. Expense(SGA) was $9,869 Mil.
Total Current Liabilities was $14,839 Mil.
Long-Term Debt was $8,056 Mil.
Net Income was -64.9511007803 + 434.128398941 + 274.725714423 + 408.293478729 = $1,052 Mil.
Non Operating Income was -363.880924997 + 29.8741472761 + 13.4473955874 + 1858.78473092 = $1,538 Mil.
Cash Flow from Operations was 7.04281761067 + 0 + 1879.61844095 + 3954.28587831 = $5,841 Mil.
|Accounts Receivable was $1,641 Mil.
Revenue was 9957.82756628 + 10827.9884895 + 10716.8635558 + 10334.2172105 = $41,837 Mil.
Gross Profit was 3887.35680881 + 4176.10112376 + 4107.33412089 + 3869.23524939 = $16,040 Mil.
Total Current Assets was $15,868 Mil.
Total Assets was $37,939 Mil.
Property, Plant and Equipment(Net PPE) was $17,697 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,477 Mil.
Selling, General & Admin. Expense(SGA) was $3,933 Mil.
Total Current Liabilities was $15,501 Mil.
Long-Term Debt was $7,881 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)|
|=||(1840.25348098 / 40735.1557987)||/||(1641.44071359 / 41836.8968221)|
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)|
|=||(4069.65251353 / 41836.8968221)||/||(3633.76139357 / 40735.1557987)|
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 - (15801.6419135 + 19118.3374719) / 38616.6409992)||/||(1 - (15867.8699982 + 17696.5200599) / 37938.7069441)|
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))|
|=||(1477.11965291 / (1477.11965291 + 17696.5200599))||/||(2752.03639707 / (2752.03639707 + 19118.3374719))|
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)|
|=||(9869.31869036 / 40735.1557987)||/||(3933.31390476 / 41836.8968221)|
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)|
|=||((8056.36218823 + 14838.9401315) / 38616.6409992)||/||((7881.49122461 + 15501.4105646) / 37938.7069441)|
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|
|=||(1052.19649131 - 1538.22534878||-||5840.94713688)||/||38616.6409992|
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 -3.52 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