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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 -2.39. The lowest was -170.75. And the median was -3.19.
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 * 1.1745||+||0.528 * 0.9861||+||0.404 * 0.9622||+||0.892 * 1.1328||+||0.115 * 1.7441|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 2.5412||+||4.679 * -0.2458||-||0.327 * 1.1978|
|This Year (Dec14) TTM:||Last Year (Dec13) TTM:|
|Accounts Receivable was $1,836 Mil.|
Revenue was 11072.9375143 + 9945.25235806 + 10827.9884895 + 10716.8635558 = $42,563 Mil.
Gross Profit was 4239.75753942 + 3874.78160059 + 4176.10112376 + 4107.33412089 = $16,398 Mil.
Total Current Assets was $16,062 Mil.
Total Assets was $37,753 Mil.
Property, Plant and Equipment(Net PPE) was $9,290 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,832 Mil.
Selling, General & Admin. Expense(SGA) was $9,617 Mil.
Total Current Liabilities was $14,789 Mil.
Long-Term Debt was $8,661 Mil.
Net Income was 408.293478729 + 540.392396416 + 903.667259825 + 642.890660891 = $2,495 Mil.
Non Operating Income was 1858.78473092 + 40.1986285174 + 51.4290210206 + -25.2215002953 = $1,925 Mil.
Cash Flow from Operations was 3954.28587831 + 1952.53272707 + 1061.68224894 + 2880.35702566 = $9,849 Mil.
|Accounts Receivable was $1,380 Mil.
Revenue was 10334.2172105 + 8934.5729638 + 8015.29014799 + 10290.0685372 = $37,574 Mil.
Gross Profit was 3869.23524939 + 3504.39133987 + 3074.93833927 + 3826.06067288 = $14,275 Mil.
Total Current Assets was $11,275 Mil.
Total Assets was $24,488 Mil.
Property, Plant and Equipment(Net PPE) was $4,854 Mil.
Depreciation, Depletion and Amortization(DDA) was $3,339 Mil.
Selling, General & Admin. Expense(SGA) was $3,341 Mil.
Total Current Liabilities was $9,064 Mil.
Long-Term Debt was $3,636 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)|
|=||(1836.14774085 / 42563.0419176)||/||(1380.06809468 / 37574.1488595)|
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)|
|=||(3874.78160059 / 37574.1488595)||/||(4239.75753942 / 42563.0419176)|
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 - (16062.1157732 + 9290.47747384) / 37753.0136141)||/||(1 - (11274.6781155 + 4854.14630082) / 24488.3766158)|
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))|
|=||(3338.5384495 / (3338.5384495 + 4854.14630082))||/||(2832.40503201 / (2832.40503201 + 9290.47747384))|
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)|
|=||(9616.60119939 / 42563.0419176)||/||(3340.75730017 / 37574.1488595)|
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)|
|=||((8661.39559954 + 14789.0015644) / 37753.0136141)||/||((3635.66324764 + 9063.60128456) / 24488.3766158)|
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|
|=||(2495.24379586 - 1925.19088016||-||9848.85787998)||/||37753.0136141|
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 -3.62 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