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GuruFocus has detected 3 Warning Signs with Banco Macro SA $BMA.
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Banco Macro SA (NYSE:BMA)
Beneish M-Score
1.28 (As of Today)

Warning Sign:

Beneish M-Score 1.28 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.

Banco Macro SA has a M-score of 1.99 signals that the company is a manipulator.

BMA' s Beneish M-Score Range Over the Past 10 Years
Min: -3.39   Max: 1.48
Current: 1.28

-3.39
1.48

During the past 13 years, the highest Beneish M-Score of Banco Macro SA was 1.48. The lowest was -3.39. And the median was -2.34.


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 Banco Macro SA 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 * 5.7349+0.528 * 1+0.404 * 1.0016+0.892 * 1.0578+0.115 * 0.8033
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8408+4.679 * 0.031-0.327 * 1.2582
=1.99

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Mar17) TTM:Last Year (Mar16) TTM:
Accounts Receivable was $811 Mil.
Revenue was 376.313767545 + 444.970004731 + 292.546030469 + 425.854934251 = $1,540 Mil.
Gross Profit was 376.313767545 + 444.970004731 + 292.546030469 + 425.854934251 = $1,540 Mil.
Total Current Assets was $0 Mil.
Total Assets was $9,652 Mil.
Property, Plant and Equipment(Net PPE) was $88 Mil.
Depreciation, Depletion and Amortization(DDA) was $16 Mil.
Selling, General & Admin. Expense(SGA) was $525 Mil.
Total Current Liabilities was $0 Mil.
Long-Term Debt was $399 Mil.
Net Income was 111.278662672 + 106.939157862 + 109.453600818 + 129.133967537 = $457 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 70.0943699732 + -16.6726383851 + 390.241238876 + -286.306101763 = $157 Mil.
Accounts Receivable was $134 Mil.
Revenue was 289.42810189 + 382.971490381 + 421.747870202 + 361.360259726 = $1,456 Mil.
Gross Profit was 289.42810189 + 382.971490381 + 421.747870202 + 361.360259726 = $1,456 Mil.
Total Current Assets was $0 Mil.
Total Assets was $7,922 Mil.
Property, Plant and Equipment(Net PPE) was $85 Mil.
Depreciation, Depletion and Amortization(DDA) was $12 Mil.
Selling, General & Admin. Expense(SGA) was $590 Mil.
Total Current Liabilities was $0 Mil.
Long-Term Debt was $260 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)
=(810.61359407 / 1539.684737) / (133.619967132 / 1455.5077222)
=0.52648024 / 0.09180299
=5.7349

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)
=(1455.5077222 / 1455.5077222) / (1539.684737 / 1539.684737)
=1 / 1
=1

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 - (0 + 87.8687273301) / 9651.64308469) / (1 - (0 + 84.7371268146) / 7922.3312791)
=0.99089598 / 0.98930402
=1.0016

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
=1539.684737 / 1455.5077222
=1.0578

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))
=(12.0772753071 / (12.0772753071 + 84.7371268146)) / (16.1535702565 / (16.1535702565 + 87.8687273301))
=0.12474668 / 0.1552895
=0.8033

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)
=(525.159086281 / 1539.684737) / (590.443089665 / 1455.5077222)
=0.34108222 / 0.40566126
=0.8408

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)
=((398.820627661 + 0) / 9651.64308469) / ((260.181457135 + 0) / 7922.3312791)
=0.04132153 / 0.03284153
=1.2582

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
=(456.805388888 - 0 - 157.356868701) / 9651.64308469
=0.031

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.

Banco Macro SA has a M-score of 1.99 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 local exchange's currency.

Banco Macro SA Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.78780.31111.32874.63180.4161.29870.46020.82611.3197
GMI 111111111
AQI 0.99961.00311.00290.99941.00021.0138110.9906
SGI 1.33321.09220.9541.27661.19281.04141.00471.12760.9147
DEPI 00.72591.56870.67261.46550.1432116.8543
SGAI 1.11730.88211.85260.76660.77631.4190.73841.04510.8889
LVGI 0.35990.79670.83190.431.74110.57821.09091.08662.7793
TATA -0.0287-0.054-0.00420.006-0.06040.0008-0.00970.028-0.0413
M-score -2.44-3.23-2.261.32-3.28-2.19-3.00-2.43-2.35

Banco Macro SA Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 0.46020.71660.66170.53790.82610.22940.65310.21291.31975.7349
GMI 1111111111
AQI 1110.98810.98930.99011.00220.99061.0016
SGI 1.00470.93260.97481.01591.12761.02281.03830.91640.91471.0578
DEPI 1116.457418.01626.10270.71526.85430.8033
SGAI 0.73840.85270.94741.13111.04511.09790.97350.79120.88890.8408
LVGI 1.09090.92040.92491.43091.08661.97161.92761.25362.77931.2582
TATA -0.0097-0.01330.00950.01560.028-0.1058-0.0718-0.1104-0.04130.031
M-score -3.00-2.81-2.74-2.36-2.43-3.20-2.82-3.87-2.351.99
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