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ZBB Energy Corp (AMEX:ZBB)
Beneish M-Score
-3.42 (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 Corp has a M-score of -3.42 suggests that the company is not a manipulator.

ZBB' s 10-Year Beneish M-Score Range
Min: -7.3   Max: 150.7
Current: -3.42

-7.3
150.7

During the past 10 years, the highest Beneish M-Score of ZBB Energy Corp was 150.70. The lowest was -7.30. And the median was -2.33.


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 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 * 0.5924+0.528 * 0.3464+0.404 * 0.5389+0.892 * 1.0542+0.115 * 1.2636
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2309+4.679 * -0.0619-0.327 * 0.3477
=-3.42

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $0.31 Mil.
Revenue was 0.565 + 1.249 + 4.572 + 0.961 = $7.35 Mil.
Gross Profit was 0.229 + -0.045 + 3.96 + 0.363 = $4.51 Mil.
Total Current Assets was $23.17 Mil.
Total Assets was $31.19 Mil.
Property, Plant and Equipment(Net PPE) was $4.25 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.96 Mil.
Selling, General & Admin. Expense(SGA) was $7.84 Mil.
Total Current Liabilities was $3.89 Mil.
Long-Term Debt was $1.96 Mil.
Net Income was -2.64 + -4.109 + 0.009 + -2.159 = $-8.90 Mil.
Non Operating Income was 1.175 + -0.354 + -0.055 + -0.131 = $0.64 Mil.
Cash Flow from Operations was -2.728 + -2.892 + 0.438 + -2.422 = $-7.60 Mil.
Accounts Receivable was $0.50 Mil.
Revenue was 1.069 + 1.033 + 2.119 + 2.748 = $6.97 Mil.
Gross Profit was 0.472 + 0.231 + 0.295 + 0.483 = $1.48 Mil.
Total Current Assets was $6.06 Mil.
Total Assets was $14.32 Mil.
Property, Plant and Equipment(Net PPE) was $5.05 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.53 Mil.
Selling, General & Admin. Expense(SGA) was $6.04 Mil.
Total Current Liabilities was $5.41 Mil.
Long-Term Debt was $2.31 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)
=(0.311 / 7.347) / (0.498 / 6.969)
=0.0423302 / 0.07145932
=0.5924

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)
=(-0.045 / 6.969) / (0.229 / 7.347)
=0.21251256 / 0.61344767
=0.3464

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 - (23.17 + 4.246) / 31.19) / (1 - (6.061 + 5.046) / 14.323)
=0.12100032 / 0.22453397
=0.5389

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
=7.347 / 6.969
=1.0542

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))
=(1.533 / (1.533 + 5.046)) / (0.96 / (0.96 + 4.246))
=0.23301414 / 0.18440261
=1.2636

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)
=(7.835 / 7.347) / (6.038 / 6.969)
=1.06642167 / 0.86640838
=1.2309

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)
=((1.956 + 3.888) / 31.19) / ((2.309 + 5.409) / 14.323)
=0.18736775 / 0.53885359
=0.3477

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
=(-8.899 - 0.635 - -7.604) / 31.19
=-0.0619

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 -3.42 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 Corp Annual Data

Jun05Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14
DSRI 169.81850.009818.43541.04910.57822.3129
GMI -0.93051.0678-1.98831.10292.09360.2771
AQI 1.01261.81151.70551.07451.17810.4556
SGI 0.90391.33621.16622.66561.60721.0166
DEPI 1.21130.53910.87430.51921.0261.0984
SGAI 1.14731.02460.94040.4550.61341.1452
LVGI 1.90021.83530.85540.59861.34280.612
TATA -0.1131-0.58-0.1781-0.1716-0.0607-0.1253
M-score 150.91-5.7711.63-1.50-2.00-2.33

ZBB Energy Corp Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 1.04930.56831.62121.2580.57820.29960.34030.54642.31290.5924
GMI 1.10422.53222.98712.97822.09380.91750.62770.21930.27720.3464
AQI 1.07451.26580.91430.86461.17810.95951.09930.50030.45560.5389
SGI 2.6651.45022.00081.52791.60731.39660.71020.98251.01661.0542
DEPI 0.51920.60720.74210.83671.02541.02570.91250.97621.09891.2636
SGAI 0.45510.75070.54670.71270.61320.6831.18741.05131.14541.2309
LVGI 0.59860.58890.77330.75241.34281.33391.32710.55830.6120.3477
TATA -0.1716-0.0947-0.106-0.1377-0.0607-0.2962-0.3003-0.1147-0.1253-0.0619
M-score -1.50-1.87-0.37-1.31-2.00-4.27-5.06-3.93-2.33-3.42
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