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ZBB Energy Corporation (AMEX:ZBB)
Beneish M-Score
-5.07 (As of Today)

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.

ZBB Energy Corporation has a M-score of -5.07 suggests that the company is not a manipulator.

ZBB' s 10-Year Beneish M-Score Range
Min: -7.3   Max: 39.53
Current: -5.07

-7.3
39.53

During the past 9 years, the highest Beneish M-Score of ZBB Energy Corporation was 39.53. The lowest was -7.30. And the median was -2.27.


Definition

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 ZBB Energy Corporation 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 * 0.3283+0.528 * 0.6277+0.404 * 1.0993+0.892 * 0.7102+0.115 * 0.9125
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1874+4.679 * -0.3003-0.327 * 1.3271
=-5.07

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $0.34 Mil.
Revenue was 0.961 + 1.069 + 1.033 + 2.119 = $5.18 Mil.
Gross Profit was 0.363 + 0.472 + 0.231 + 0.295 = $1.36 Mil.
Total Current Assets was $3.29 Mil.
Total Assets was $10.87 Mil.
Property, Plant and Equipment(Net PPE) was $4.69 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.64 Mil.
Selling, General & Admin. Expense(SGA) was $5.50 Mil.
Total Current Liabilities was $4.52 Mil.
Long-Term Debt was $2.22 Mil.
Net Income was -2.159 + -2.597 + -3.088 + -2.824 = $-10.67 Mil.
Non Operating Income was -0.131 + -0.117 + -0.128 + -0.163 = $-0.54 Mil.
Cash Flow from Operations was -2.422 + -0.811 + -1.915 + -1.716 = $-6.86 Mil.
Accounts Receivable was $1.44 Mil.
Revenue was 2.748 + 1.823 + 1.081 + 1.645 = $7.30 Mil.
Gross Profit was 0.483 + 0.286 + 0.058 + 0.376 = $1.20 Mil.
Total Current Assets was $7.61 Mil.
Total Assets was $17.00 Mil.
Property, Plant and Equipment(Net PPE) was $5.26 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.63 Mil.
Selling, General & Admin. Expense(SGA) was $6.52 Mil.
Total Current Liabilities was $5.23 Mil.
Long-Term Debt was $2.72 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(0.335 / 5.182) / (1.437 / 7.297)
=0.06464685 / 0.19693025
=0.3283

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.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(0.472 / 7.297) / (0.363 / 5.182)
=0.16486227 / 0.26263991
=0.6277

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (3.285 + 4.685) / 10.872) / (1 - (7.61 + 5.262) / 17)
=0.26692421 / 0.24282353
=1.0993

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.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=5.182 / 7.297
=0.7102

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))
=(1.629 / (1.629 + 5.262)) / (1.638 / (1.638 + 4.685))
=0.2363953 / 0.25905425
=0.9125

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)
=(5.496 / 5.182) / (6.518 / 7.297)
=1.06059437 / 0.8932438
=1.1874

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)
=((2.222 + 4.522) / 10.872) / ((2.719 + 5.227) / 17)
=0.62030905 / 0.46741176
=1.3271

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(-10.668 - -0.539 - -6.864) / 10.872
=-0.3003

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.

ZBB Energy Corporation has a M-score of -5.07 suggests that the company will not be a manipulator.


Related Terms

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


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

ZBB Energy Corporation Annual Data

Jun05Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13
DSRI 8.25180.009436.01330.74360.5456
GMI -0.93051.0678-1.98831.10292.0936
AQI 1.01261.81151.70551.07451.1781
SGI 0.90391.33621.16622.66561.6072
DEPI 1.21130.53910.87430.51921.026
SGAI 1.14731.02460.94040.4550.6134
LVGI 1.90021.83530.85540.59861.3428
TATA -0.1131-0.58-0.1781-0.1716-0.0607
M-score 2.27-5.7727.80-1.78-2.03

ZBB Energy Corporation Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 44.002840.980.13490.74380.661.98951.61010.54560.33990.3283
GMI -3.049-1.859-2.2231.10422.53222.98712.97822.09380.91750.6277
AQI 1.36592.06541.10251.07451.26580.91430.86461.17810.95951.0993
SGI 4.6888.809211.80052.6651.45022.00081.52791.60731.39660.7102
DEPI 0.67440.48410.53910.51920.60720.74210.83671.02541.02570.9125
SGAI 0.250.15020.10580.45510.75070.54670.71270.61320.6831.1874
LVGI 0.59120.64380.8440.59860.58890.77330.75241.34281.33391.3271
TATA -0.1589-0.1841-0.2009-0.1716-0.0947-0.106-0.1377-0.0607-0.2962-0.3003
M-score 37.8639.533.91-1.78-1.79-0.04-0.99-2.03-4.23-5.07
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