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ZBB Energy Corp (AMEX:ZBB)
Beneish M-Score
-0.89 (As of Today)

Warning Sign:

Beneish M-Score -0.89 higher than -2.22, which implies that it might have manipulated its financial results.

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 -0.89 signals that the company is a manipulator.

ZBB' s 10-Year Beneish M-Score Range
Min: -7.3   Max: 150.79
Current: -0.89

-7.3
150.79

During the past 10 years, the highest Beneish M-Score of ZBB Energy Corp was 150.79. 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 * 1.1398+0.528 * 3.3599+0.404 * 1.0818+0.892 * 0.3536+0.115 * 1.1746
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 3.2125+4.679 * 0.2325-0.327 * 0.9007
=-0.89

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was $0.24 Mil.
Revenue was 0.585 + 0.301 + 0.565 + 1.249 = $2.70 Mil.
Gross Profit was 0.276 + 0.069 + 0.229 + -0.045 = $0.53 Mil.
Total Current Assets was $17.18 Mil.
Total Assets was $24.69 Mil.
Property, Plant and Equipment(Net PPE) was $4.32 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.10 Mil.
Selling, General & Admin. Expense(SGA) was $7.64 Mil.
Total Current Liabilities was $3.88 Mil.
Long-Term Debt was $1.78 Mil.
Net Income was -3.456 + -3.376 + -2.64 + -4.109 = $-13.58 Mil.
Non Operating Income was -0.207 + -0.225 + 1.175 + -0.354 = $0.39 Mil.
Cash Flow from Operations was -11.091 + -2.998 + -2.728 + -2.892 = $-19.71 Mil.
Accounts Receivable was $0.58 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.



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)
=(0.235 / 2.7) / (0.583 / 7.635)
=0.08703704 / 0.07635887
=1.1398

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)
=(0.069 / 7.635) / (0.276 / 2.7)
=0.65828422 / 0.19592593
=3.3599

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 - (17.181 + 4.316) / 24.685) / (1 - (16.15 + 4.527) / 23.48)
=0.12914726 / 0.11937819
=1.0818

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
=2.7 / 7.635
=0.3536

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))
=(1.421 / (1.421 + 4.527)) / (1.102 / (1.102 + 4.316))
=0.23890383 / 0.20339609
=1.1746

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)
=(7.64 / 2.7) / (6.725 / 7.635)
=2.82962963 / 0.88081205
=3.2125

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)
=((1.776 + 3.881) / 24.685) / ((2.134 + 3.84) / 23.48)
=0.22916751 / 0.2544293
=0.9007

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
=(-13.581 - 0.389 - -19.709) / 24.685
=0.2325

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 -0.89 signals that the company is likely to 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

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 1.62121.2580.57820.29960.34030.54642.31290.59240.72021.1398
GMI 2.98712.97822.09380.91750.62770.21930.27720.34640.41693.3599
AQI 0.91430.86461.17810.95951.09930.50030.45560.53890.4591.0818
SGI 2.00081.52791.60731.39660.71020.98251.01661.05421.29040.3536
DEPI 0.74210.83671.02541.02570.91250.97621.09891.26361.9471.1746
SGAI 0.54670.71270.61320.6831.18741.05131.14541.23091.19443.2125
LVGI 0.77330.75241.34281.33391.32710.55830.6120.34770.31590.9007
TATA -0.106-0.1377-0.0607-0.2962-0.3003-0.1147-0.1253-0.0619-0.08930.2325
M-score -0.37-1.31-2.00-4.27-5.06-3.93-2.33-3.42-3.12-0.89
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