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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.
ZBB Energy Corp has a M-score of -3.98 suggests that the company is not a manipulator.
During the past 9 years, the highest Beneish M-Score of ZBB Energy Corp was 39.53. The lowest was -7.30. And the median was -2.50.
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 Corp 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 * 0.4957||+||0.528 * 0.2193||+||0.404 * 0.5003||+||0.892 * 0.9825||+||0.115 * 0.9762|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0513||+||4.679 * -0.1147||-||0.327 * 0.5583|
|This Year (Mar14) TTM:||Last Year (Mar13) TTM:|
|Accounts Receivable was $0.68 Mil.|
Revenue was 4.572 + 0.961 + 1.069 + 1.033 = $7.64 Mil.
Gross Profit was 3.96 + 0.363 + 0.472 + 0.231 = $5.03 Mil.
Total Current Assets was $16.15 Mil.
Total Assets was $23.48 Mil.
Property, Plant and Equipment(Net PPE) was $4.53 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.42 Mil.
Selling, General & Admin. Expense(SGA) was $6.73 Mil.
Total Current Liabilities was $3.84 Mil.
Long-Term Debt was $2.13 Mil.
Net Income was 0.009 + -2.159 + -2.597 + -3.088 = $-7.84 Mil.
Non Operating Income was -0.055 + -0.131 + -0.117 + -0.128 = $-0.43 Mil.
Cash Flow from Operations was 0.438 + -2.422 + -0.811 + -1.915 = $-4.71 Mil.
|Accounts Receivable was $1.39 Mil.
Revenue was 2.119 + 2.748 + 1.823 + 1.081 = $7.77 Mil.
Gross Profit was 0.295 + 0.483 + 0.286 + 0.058 = $1.12 Mil.
Total Current Assets was $6.82 Mil.
Total Assets was $16.05 Mil.
Property, Plant and Equipment(Net PPE) was $5.40 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.64 Mil.
Selling, General & Admin. Expense(SGA) was $6.51 Mil.
Total Current Liabilities was $4.85 Mil.
Long-Term Debt was $2.46 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)|
|=||(0.677 / 7.635)||/||(1.39 / 7.771)|
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)|
|=||(0.363 / 7.771)||/||(3.96 / 7.635)|
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 - (16.15 + 4.527) / 23.48)||/||(1 - (6.823 + 5.395) / 16.047)|
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))|
|=||(1.641 / (1.641 + 5.395))||/||(1.421 / (1.421 + 4.527))|
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)|
|=||(6.725 / 7.635)||/||(6.511 / 7.771)|
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)|
|=||((2.134 + 3.84) / 23.48)||/||((2.461 + 4.852) / 16.047)|
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|
|=||(-7.835 - -0.431||-||-4.71)||/||23.48|
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 Corp has a M-score of -3.98 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
ZBB Energy Corp Annual Data
ZBB Energy Corp Quarterly Data