EPAM Systems Beneish M-Score Historical Data
The historical data trend for EPAM Systems's Beneish M-Score can be seen below:
* 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.
EPAM Systems Beneish M-Score Chart
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EPAM Systems Annual Data
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Dec14 |
Dec15 |
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Dec18 |
Dec19 |
Dec20 |
Dec21 |
Dec22 |
Dec23 |
| Beneish M-Score |
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-2.47 |
-2.84 |
-1.92 |
-2.21 |
-2.54 |
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EPAM Systems Quarterly Data
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Dec19 |
Mar20 |
Jun20 |
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Mar24 |
Jun24 |
Sep24 |
| Beneish M-Score |
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-2.50 |
-2.54 |
-2.57 |
-2.50 |
-2.57 |
Competitive Comparison of EPAM Systems's Beneish M-Score
For the Information Technology Services subindustry, EPAM Systems's Beneish M-Score, along with its competitors' market caps and Beneish M-Score data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
EPAM Systems's Beneish M-Score Distribution in the Software Industry
For the Software industry and Technology sector, EPAM Systems's Beneish M-Score distribution charts can be found below:
* The bar in red indicates where EPAM Systems's Beneish M-Score falls into.
EPAM Systems 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 EPAM Systems 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 * 1.0524 | + | 0.528 * 1.0024 | + | 0.404 * 1.0986 | + | 0.892 * 0.9732 | + | 0.115 * 0.9712 |
| - | 0.172 * SGAI | + | 4.679 * TATA | - | 0.327 * LVGI |
| - | 0.172 * 1.0368 | + | 4.679 * -0.031639 | - | 0.327 * 1.008 |
| = | -2.57 |
* 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 (Sep24) TTM: | Last Year (Sep23) TTM: |
Total Receivables was $935 Mil.
Revenue was 1167.527 + 1146.597 + 1165.465 + 1157.257 = $4,637 Mil.
Gross Profit was 403.535 + 335.74 + 331.131 + 359.624 = $1,430 Mil.
Total Current Assets was $3,107 Mil.
Total Assets was $4,457 Mil.
Property, Plant and Equipment(Net PPE) was $337 Mil.
Depreciation, Depletion and Amortization(DDA) was $124 Mil.
Selling, General, & Admin. Expense(SGA) was $813 Mil.
Total Current Liabilities was $681 Mil.
Long-Term Debt & Capital Lease Obligation was $128 Mil.
Net Income was 136.346 + 98.645 + 116.243 + 97.554 = $449 Mil.
Non Operating Income was -0.71 + 1.213 + -1.919 + -9.053 = $-10 Mil.
Cash Flow from Operations was 241.962 + 57.027 + 129.92 + 171.369 = $600 Mil.
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Total Receivables was $913 Mil.
Revenue was 1152.136 + 1170.206 + 1210.941 + 1231.303 = $4,765 Mil.
Gross Profit was 357.871 + 361.491 + 355.04 + 398.575 = $1,473 Mil.
Total Current Assets was $2,925 Mil.
Total Assets was $4,162 Mil.
Property, Plant and Equipment(Net PPE) was $376 Mil.
Depreciation, Depletion and Amortization(DDA) was $133 Mil.
Selling, General, & Admin. Expense(SGA) was $806 Mil.
Total Current Liabilities was $614 Mil.
Long-Term Debt & Capital Lease Obligation was $136 Mil.
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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) |
| = | (935.077 / 4636.846) | / | (913.029 / 4764.586) |
| = | 0.201662 | / | 0.191628 |
| | = | 1.0524 |
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) |
| = | (1472.977 / 4764.586) | / | (1430.03 / 4636.846) |
| = | 0.309151 | / | 0.308406 |
| | = | 1.0024 |
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 - (3106.856 + 337.431) / 4457.197) | / | (1 - (2925.288 + 375.965) / 4162.272) |
| = | 0.227253 | / | 0.206863 |
| | = | 1.0986 |
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 |
| = | 4636.846 | / | 4764.586 |
| | = | 0.9732 |
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)) |
| = | (133.071 / (133.071 + 375.965)) | / | (124.272 / (124.272 + 337.431)) |
| = | 0.261418 | / | 0.26916 |
| | = | 0.9712 |
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) |
| = | (813.303 / 4636.846) | / | (806.045 / 4764.586) |
| = | 0.1754 | / | 0.169174 |
| | = | 1.0368 |
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) |
| = | ((127.882 + 681.046) / 4457.197) | / | ((135.832 + 613.578) / 4162.272) |
| = | 0.181488 | / | 0.180048 |
| | = | 1.008 |
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 |
| = | (448.788 - -10.469 | - | 600.278) | / | 4457.197 |
| | = | -0.031639 |
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.
EPAM Systems has a M-score of -2.57 suggests that the company is unlikely to be a manipulator.
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