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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.
Tata Motors Ltd has a M-score of -3.33 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Tata Motors Ltd was -2.42. The lowest was -170.75. And the median was -3.26.
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 * 0.4935||+||0.528 * 0.9882||+||0.404 * 2.259||+||0.892 * 1.3793||+||0.115 * 0.4427|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 3.2019||+||4.679 * -0.1848||-||0.327 * 0.759|
|This Year (Sep14) TTM:||Last Year (Sep13) TTM:|
|Accounts Receivable was $1,203 Mil.|
Revenue was 7729.90353698 + 9134.81228669 + 15866.0150754 + 8777.59472817 = $41,508 Mil.
Gross Profit was 3061.09324759 + 3505.11945392 + 5995.21943049 + 3347.61120264 = $15,909 Mil.
Total Current Assets was $11,733 Mil.
Total Assets was $26,561 Mil.
Property, Plant and Equipment(Net PPE) was $5,989 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,943 Mil.
Selling, General & Admin. Expense(SGA) was $11,308 Mil.
Total Current Liabilities was $9,862 Mil.
Long-Term Debt was $3,019 Mil.
Net Income was 723.47266881 + 1182.59385666 + -197.197654941 + 1019.7693575 = $2,729 Mil.
Non Operating Income was -1385.85209003 + -808.873720137 + 2316.01842546 + 186.161449753 = $307 Mil.
Cash Flow from Operations was 1911.5755627 + 1058.02047782 + 2795.33500838 + 1563.42668863 = $7,328 Mil.
|Accounts Receivable was $1,767 Mil.
Revenue was 7426.7310789 + 6216.99544765 + 10373.0199081 + 6076.67731629 = $30,093 Mil.
Gross Profit was 2874.39613527 + 2438.54324734 + 3856.90352221 + 2228.43450479 = $11,398 Mil.
Total Current Assets was $13,367 Mil.
Total Assets was $32,082 Mil.
Property, Plant and Equipment(Net PPE) was $13,989 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,701 Mil.
Selling, General & Admin. Expense(SGA) was $2,560 Mil.
Total Current Liabilities was $14,101 Mil.
Long-Term Debt was $6,399 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)|
|=||(1202.57234727 / 41508.3256272)||/||(1766.55877617 / 30093.423751)|
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)|
|=||(3505.11945392 / 30093.423751)||/||(3061.09324759 / 41508.3256272)|
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 - (11733.1189711 + 5988.74598071) / 26561.0932476)||/||(1 - (13366.8293076 + 13988.7681159) / 32081.884058)|
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))|
|=||(1701.40646544 / (1701.40646544 + 13988.7681159))||/||(1942.8518607 / (1942.8518607 + 5988.74598071))|
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)|
|=||(11308.1403884 / 41508.3256272)||/||(2560.46124163 / 30093.423751)|
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)|
|=||((3019.2926045 + 9861.73633441) / 26561.0932476)||/||((6398.58937198 + 14101.2399356) / 32081.884058)|
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|
|=||(2728.63822802 - 307.454065045||-||7328.35773752)||/||26561.0932476|
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 -3.33 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