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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 * 0.8574||+||0.528 * 0.9881||+||0.404 * 0.9335||+||0.892 * 1.1711||+||0.115 * 1.4002|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 3.1378||+||4.679 * -0.0958||-||0.327 * 0.9453|
|This Year (Dec14) TTM:||Last Year (Dec13) TTM:|
|Accounts Receivable was $1,376 Mil.|
Revenue was 9200.31298905 + 7830.61889251 + 9057.52961083 + 15734.2375415 = $41,823 Mil.
Gross Profit was 3621.28325509 + 3100.9771987 + 3475.46531303 + 5945.42524917 = $16,143 Mil.
Total Current Assets was $12,216 Mil.
Total Assets was $27,432 Mil.
Property, Plant and Equipment(Net PPE) was $6,474 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,989 Mil.
Selling, General & Admin. Expense(SGA) was $11,348 Mil.
Total Current Liabilities was $9,942 Mil.
Long-Term Debt was $3,505 Mil.
Net Income was 928.012519562 + 732.899022801 + 1172.58883249 + -195.559800664 = $2,638 Mil.
Non Operating Income was -1777.77777778 + -1403.90879479 + -802.030456853 + 2296.78239203 = $-1,687 Mil.
Cash Flow from Operations was 1194.05320814 + 1936.48208469 + 1049.06937394 + 2772.1179402 = $6,952 Mil.
|Accounts Receivable was $1,370 Mil.
Revenue was 8720.1309329 + 8888.86168521 + 7886.05263158 + 10216.5641026 = $35,712 Mil.
Gross Profit was 3325.69558101 + 3478.60413355 + 3017.08823529 + 3798.73001508 = $13,620 Mil.
Total Current Assets was $11,191 Mil.
Total Assets was $24,308 Mil.
Property, Plant and Equipment(Net PPE) was $4,818 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,363 Mil.
Selling, General & Admin. Expense(SGA) was $3,088 Mil.
Total Current Liabilities was $8,997 Mil.
Long-Term Debt was $3,609 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)|
|=||(1375.58685446 / 41822.6990339)||/||(1369.88543372 / 35711.6093523)|
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)|
|=||(3100.9771987 / 35711.6093523)||/||(3621.28325509 / 41822.6990339)|
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 - (12215.9624413 + 6474.17840376) / 27431.9248826)||/||(1 - (11191.4893617 + 4818.33060556) / 24307.6923077)|
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))|
|=||(2362.75411129 / (2362.75411129 + 4818.33060556))||/||(1988.67161521 / (1988.67161521 + 6474.17840376))|
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)|
|=||(11348.3767789 / 41822.6990339)||/||(3088.22205176 / 35711.6093523)|
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)|
|=||((3505.47730829 + 9942.0970266) / 27431.9248826)||/||((3608.83797054 + 8996.72667758) / 24307.6923077)|
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|
|=||(2637.94057419 - -1686.93463739||-||6951.72260697)||/||27431.9248826|
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 -3.24 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