Export Import Bank of Bangladesh 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 Export Import Bank of Bangladesh 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 | + | 0.528 * 1 | + | 0.404 * 1.0008 | + | 0.892 * 0.9656 | + | 0.115 * 0.8114 |
| - | 0.172 * SGAI | + | 4.679 * TATA | - | 0.327 * LVGI |
| - | 0.172 * 1.0248 | + | 4.679 * -0.009063 | - | 0.327 * 1.0458 |
| = | -2.59 |
* 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 (Dec23) TTM: | Last Year (Dec22) TTM: |
Total Receivables was BDT0 Mil.
Revenue was 4012.144 + 2617.257 + 4108.59 + 2652.581 = BDT13,391 Mil.
Gross Profit was 4012.144 + 2617.257 + 4108.59 + 2652.581 = BDT13,391 Mil.
Total Current Assets was BDT0 Mil.
Total Assets was BDT576,140 Mil.
Property, Plant and Equipment(Net PPE) was BDT6,009 Mil.
Depreciation, Depletion and Amortization(DDA) was BDT585 Mil.
Selling, General, & Admin. Expense(SGA) was BDT27 Mil.
Total Current Liabilities was BDT0 Mil.
Long-Term Debt & Capital Lease Obligation was BDT19,400 Mil.
Net Income was 1087.942 + 533.954 + 1555.999 + 202.076 = BDT3,380 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = BDT0 Mil.
Cash Flow from Operations was 10714.903 + -8784.825 + 6307.803 + 363.896 = BDT8,602 Mil.
|
Total Receivables was BDT0 Mil.
Revenue was 5113.165 + 2896.575 + 3753.881 + 2103.791 = BDT13,867 Mil.
Gross Profit was 5113.165 + 2896.575 + 3753.881 + 2103.791 = BDT13,867 Mil.
Total Current Assets was BDT0 Mil.
Total Assets was BDT540,408 Mil.
Property, Plant and Equipment(Net PPE) was BDT6,081 Mil.
Depreciation, Depletion and Amortization(DDA) was BDT471 Mil.
Selling, General, & Admin. Expense(SGA) was BDT27 Mil.
Total Current Liabilities was BDT0 Mil.
Long-Term Debt & Capital Lease Obligation was BDT17,400 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) |
| = | (0 / 13390.572) | / | (0 / 13867.412) |
| = | 0 | / | 0 |
| | = | 1 |
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) |
| = | (13867.412 / 13867.412) | / | (13390.572 / 13390.572) |
| = | 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 - (0 + 6008.833) / 576139.524) | / | (1 - (0 + 6080.744) / 540408.096) |
| = | 0.989571 | / | 0.988748 |
| | = | 1.0008 |
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 |
| = | 13390.572 | / | 13867.412 |
| | = | 0.9656 |
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)) |
| = | (471.394 / (471.394 + 6080.744)) | / | (584.624 / (584.624 + 6008.833)) |
| = | 0.071945 | / | 0.088667 |
| | = | 0.8114 |
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) |
| = | (27.086 / 13390.572) | / | (27.379 / 13867.412) |
| = | 0.002023 | / | 0.001974 |
| | = | 1.0248 |
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) |
| = | ((19400 + 0) / 576139.524) | / | ((17400 + 0) / 540408.096) |
| = | 0.033672 | / | 0.032198 |
| | = | 1.0458 |
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 |
| = | (3379.971 - 0 | - | 8601.777) | / | 576139.524 |
| | = | -0.009063 |
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.
Export Import Bank of Bangladesh has a M-score of -2.59 suggests that the company is unlikely to be a manipulator.
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