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ZBB Energy Corp (AMEX:ZBB)
Beneish M-Score
-3.98 (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 -3.98 suggests that the company is not a manipulator.

ZBB' s 10-Year Beneish M-Score Range
Min: -7.77   Max: 101.48
Current: -3.98

-7.77
101.48

During the past 9 years, the highest Beneish M-Score of ZBB Energy Corp was 101.48. The lowest was -7.77. And the median was -2.03.


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 * 0.4957+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
=-3.98

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

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

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)
=(0.677 / 7.635) / (1.39 / 7.771)
=0.0886706 / 0.17887016
=0.4957

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)
=(0.363 / 7.771) / (3.96 / 7.635)
=0.14438296 / 0.65828422
=0.2193

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 - (16.15 + 4.527) / 23.48) / (1 - (6.823 + 5.395) / 16.047)
=0.11937819 / 0.23861158
=0.5003

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
=7.635 / 7.771
=0.9825

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))
=0.23322911 / 0.23890383
=0.9762

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)
=0.88081205 / 0.83785871
=1.0513

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)
=0.2544293 / 0.45572381
=0.5583

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
=(-7.835 - -0.431 - -4.71) / 23.48
=-0.1147

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.


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

Jun05Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13
DSRI 114.23420.014518.43541.45260.5456
GMI 1.1968-0.8303-1.98831.10292.0936
AQI 1.06371.72441.70551.07451.1781
SGI 1.38750.87051.16622.66561.6072
DEPI 1.21130.53910.87430.51921.026
SGAI 0.74741.57270.94040.4550.6134
LVGI 1.7631.97810.85540.59861.3428
TATA -0.1158-0.58-0.1781-0.1716-0.0607
M-score 101.45-7.3611.63-1.13-2.03

ZBB Energy Corp Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 40.980.13491.45290.661.98951.61010.54560.33990.32830.4957
GMI -7.3622-9.19971.10422.53222.98712.97822.09380.91750.62770.2193
AQI 2.06541.10251.07451.26580.91430.86461.17810.95951.09930.5003
SGI 8.809211.80052.6651.45022.00081.52791.60731.39660.71020.9825
DEPI 0.48410.53910.51920.60720.74210.83671.02541.02570.91250.9762
SGAI 0.15020.10580.45510.75070.54670.71270.61320.6831.18741.0513
LVGI 0.64380.8440.59860.58890.77330.75241.34281.33391.32710.5583
TATA -0.1841-0.2009-0.1716-0.0947-0.106-0.1377-0.0607-0.2962-0.3003-0.1147
M-score 36.620.23-1.13-1.79-0.04-0.99-2.03-4.23-5.07-3.98
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