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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 -1.82. The lowest was -1.91. And the median was -1.87.
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 * 1.0753||+||0.528 * 0.9808||+||0.404 * 2.6803||+||0.892 * 1.1238||+||0.115 * 0.5378|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 2.9965||+||4.679 * -0.0079||-||0.327 * 1.0485|
|This Year (Mar15) TTM:||Last Year (Mar14) TTM:|
|Accounts Receivable was $2,097 Mil.|
Revenue was 10858.477445 + 11072.9375143 + 9945.25235806 + 10827.9884895 = $42,705 Mil.
Gross Profit was 4368.00441738 + 4239.75753942 + 3874.78160059 + 4176.10112376 = $16,659 Mil.
Total Current Assets was $15,901 Mil.
Total Assets was $37,542 Mil.
Property, Plant and Equipment(Net PPE) was $9,393 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,186 Mil.
Selling, General & Admin. Expense(SGA) was $11,830 Mil.
Total Current Liabilities was $15,887 Mil.
Long-Term Debt was $8,735 Mil.
Net Income was 252.840486232 + 408.293478729 + 540.392396416 + 903.667259825 = $2,105 Mil.
Non Operating Income was 451.624106721 + 1858.78473092 + 40.1986285174 + 51.4290210206 = $2,402 Mil.
Cash Flow from Operations was 0 + 0 + 0 + 0 = $0 Mil.
|Accounts Receivable was $1,735 Mil.
Revenue was 10716.8635558 + 10334.2172105 + 8937.00980392 + 8013.26733352 = $38,001 Mil.
Gross Profit was 4107.33412089 + 3869.23524939 + 3497.44689542 + 3065.75945465 = $14,540 Mil.
Total Current Assets was $15,726 Mil.
Total Assets was $36,096 Mil.
Property, Plant and Equipment(Net PPE) was $15,977 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,805 Mil.
Selling, General & Admin. Expense(SGA) was $3,513 Mil.
Total Current Liabilities was $15,153 Mil.
Long-Term Debt was $7,426 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)|
|=||(2096.56292763 / 42704.6558068)||/||(1734.95930958 / 38001.3579038)|
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)|
|=||(4239.75753942 / 38001.3579038)||/||(4368.00441738 / 42704.6558068)|
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 - (15900.8218564 + 9393.31631469) / 37542.0075063)||/||(1 - (15725.7547417 + 15976.799895) / 36096.0687799)|
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))|
|=||(1805.23785897 / (1805.23785897 + 15976.799895))||/||(2185.94528601 / (2185.94528601 + 9393.31631469))|
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)|
|=||(11830.1313399 / 42704.6558068)||/||(3513.21464556 / 38001.3579038)|
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)|
|=||((8735.04533414 + 15887.4320788) / 37542.0075063)||/||((7425.77443066 + 15153.2667192) / 36096.0687799)|
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|
|=||(2105.1936212 - 2402.03648717||-||0)||/||37542.0075063|
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 -2.08 signals that the company is likely to 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