HubSpot (NYSE:HUBS) Beneish M-Score

HubSpot 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 HubSpot for today is based on a combination of the following eight different indices:

* 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.

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.

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.

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.

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.

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.

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.

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

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

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.

HubSpot has a M-score of -2.99 suggests that the company is unlikely to be a manipulator.

HubSpot Beneish M-Score Related Terms

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HubSpot (NYSE:HUBS) Business Description

Industry

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Traded in Other Exchanges

HUBS:Mexico 096:Germany H2UB34:Brazil

Address

25 First Street, 2nd Floor, Cambridge, MA, USA, 02141

Website

https://www.hubspot.com

HubSpot provides a cloud-based marketing, sales, and customer service software platform referred to as the growth platform. The applications are available ala carte or packaged together. HubSpot's mission is to help companies grow better and has expanded from its initial focus on inbound marketing to embrace marketing, sales, and service more broadly. The company was founded in 2006, completed its initial public offering in 2014, and is headquartered in Cambridge, Massachusetts.

Executives

Andrew Anagnost	director	111 MCINNIS PARKWAY, AUTODESK, INC., SAN RAFAEL CA 94903
Dawson Alyssa Harvey	officer: Chief Legal Officer	1100 PAGE MILL RD, PALO ALTO CA 94304-1974
Claire D'oyly-hughes Johnson	director	C/O AMERESCO, INC., 111 SPEEN STREET, STE. 401, FRAMINGHAM MA 01701-3812
Nick V. Caldwell	director	C/O HUBSPOT, INC., 25 FIRST STREET, CAMBRIDGE MA 02141
Yamini Rangan	officer: Chief Customer Officer	333 BRANNAN STREET, SAN FRANCISCO CA 94107
Kathryn Bueker	officer: Chief Financial Officer	C/O HUBSPOT, INC., 25 FIRST STREET, 2ND FLOOR, CAMBRIDGE MA 02141
Avanish Sahai	director	C/O HUBSPOT, INC., 25 FIRST STREET, 2ND FLOOR, CAMBRIDGE MA 02141
Jill A Ward	director	C/O FLEETMATICS, 1100 WINTER STREET, SUITE 4600, WALTHAM MA 02451
Jay Simons	director	25 FIRST STREET, 2ND FLOOR, CAMBRIDGE MA 02141
Julia Herendeen	director	25 FIRST STREET, 2ND FLOOR, CAMBRIDGE MA 02141
John Kinzer	officer: Chief Financial Officer	25 FIRST STREET, 2ND FLOOR, CAMBRIDGE MA 02141
Brian Halligan	director, officer: Chief Executive Officer	C/O HUBSPOT, 25 FIRST STREET, CAMBRIDGE MA 02141
Hunter Madeley	officer: SVP, Global Sales	25 FIRST STREET, 2ND FLOOR, CAMBRIDGE MA 02141
John P. Kelleher	officer: General Counsel	25 FIRST STREET, 2ND FLOOR, CAMBRIDGE MA 02141
Dharmesh Shah	director, officer: Chief Technology Officer	25 FIRST STREET, 2ND FLOOR, CAMBRIDGE MA 02141