Sul America Beneish M-Score Calculation
The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Altman Z-Score) or business trend (Piotroski 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 Sul America 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 * 1.018 | + | 0.528 * 1 | + | 0.404 * 1.0585 | + | 0.892 * 1.0985 | + | 0.115 * 0.8573 |
| - | 0.172 * SGAI | + | 4.679 * TATA | - | 0.327 * LVGI |
| - | 0.172 * 0.3984 | + | 4.679 * 0.00932 | - | 0.327 * 1.3118 |
| = | -2.32 |
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
| This Year (Sep22) TTM: | Last Year (Sep21) TTM: |
Total Receivables was R$3,312 Mil.
Revenue was 6264.516 + 5818.424 + 5570.132 + 5474.453 = R$23,128 Mil.
Gross Profit was 6264.516 + 5818.424 + 5570.132 + 5474.453 = R$23,128 Mil.
Total Current Assets was R$9,596 Mil.
Total Assets was R$30,219 Mil.
Property, Plant and Equipment(Net PPE) was R$224 Mil.
Depreciation, Depletion and Amortization(DDA) was R$161 Mil.
Selling, General, & Admin. Expense(SGA) was R$475 Mil.
Total Current Liabilities was R$1,038 Mil.
Long-Term Debt & Capital Lease Obligation was R$3,190 Mil.
Net Income was 49.169 + 138.866 + 24.392 + -31.005 = R$181 Mil.
Non Operating Income was 44.958 + 106.973 + 54.617 + 108.642 = R$315 Mil.
Cash Flow from Operations was 257.387 + 305.264 + -906.37 + -71.689 = R$-415 Mil.
|
Total Receivables was R$2,961 Mil.
Revenue was 5342.877 + 5229.311 + 5215.038 + 5266.73 = R$21,054 Mil.
Gross Profit was 5342.877 + 5229.311 + 5215.038 + 5266.73 = R$21,054 Mil.
Total Current Assets was R$9,787 Mil.
Total Assets was R$27,711 Mil.
Property, Plant and Equipment(Net PPE) was R$252 Mil.
Depreciation, Depletion and Amortization(DDA) was R$140 Mil.
Selling, General, & Admin. Expense(SGA) was R$1,085 Mil.
Total Current Liabilities was R$673 Mil.
Long-Term Debt & Capital Lease Obligation was R$2,283 Mil.
|
1. DSRI = Days Sales in Receivables Index
Measured as the ratio of Revenue in Total 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) |
| = | (3311.552 / 23127.525) | / | (2961.355 / 21053.956) |
| = | 0.143187 | / | 0.140656 |
| | = | 1.018 |
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) |
| = | (21053.956 / 21053.956) | / | (23127.525 / 23127.525) |
| = | 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 Property, Plant and Equipment to Total Assets.
| AQI | = | (1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) | / | (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1) |
| = | (1 - (9595.728 + 224.476) / 30219.218) | / | (1 - (9787.425 + 251.714) / 27711.292) |
| = | 0.675034 | / | 0.637724 |
| | = | 1.0585 |
4. SGI = Sales Growth Index
Ratio of Revenue 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 |
| = | 23127.525 | / | 21053.956 |
| | = | 1.0985 |
5. DEPI = Depreciation Index
Measured as the ratio of the rate of Depreciation, Depletion and Amortization 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)) |
| = | (140.367 / (140.367 + 251.714)) | / | (160.951 / (160.951 + 224.476)) |
| = | 0.358005 | / | 0.417591 |
| | = | 0.8573 |
Note: If the Depreciation, Depletion and Amortization data is not available, we assume that the depreciation rate is constant and set the Depreciation Index to 1.
6. SGAI = Sales, General and Administrative expenses Index
The ratio of Selling, General, & Admin. Expense(SGA) to Sales 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) |
| = | (474.746 / 23127.525) | / | (1084.812 / 21053.956) |
| = | 0.020527 | / | 0.051525 |
| | = | 0.3984 |
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 in leverage
| LVGI | = | ((LTD_t + CurrentLiabilities_t) / TotalAssets_t) | / | ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1) |
| = | ((3189.951 + 1038.243) / 30219.218) | / | ((2283.043 + 672.765) / 27711.292) |
| = | 0.139917 | / | 0.106664 |
| | = | 1.3118 |
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 |
| = | (181.422 - 315.19 | - | -415.408) | / | 30219.218 |
| | = | 0.00932 |
An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator. An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.
Sul America has a M-score of -2.32 suggests that the company is unlikely to be a manipulator.
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
Portfolio Contest
BSP:SULA4 has been successfully added to your