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# ICICI Bank (NYSE:IBN) Beneish M-Score

: -2.29 (As of Today)
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Note: Financial institutions were excluded from the sample in Beneish paper when calculating Beneish M-Score. Thus, the prediction might not fit banks and insurance companies.

The zones of discrimination for M-Score is as such:

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.

Good Sign:

Beneish M-Score -2.29 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

The historical rank and industry rank for ICICI Bank's Beneish M-Score or its related term are showing as below:

IBN' s Beneish M-Score Range Over the Past 10 Years
Min: -4.27   Med: -2.38   Max: -1.2
Current: -2.29

During the past 13 years, the highest Beneish M-Score of ICICI Bank was -1.20. The lowest was -4.27. And the median was -2.38.

## ICICI Bank 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 ICICI Bank 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 * 0.9414 + 0.528 * 1 + 0.404 * 1.047 + 0.892 * 1.0791 + 0.115 * 0.9385 - 0.172 * SGAI + 4.679 * TATA - 0.327 * LVGI - 0.172 * 0.9995 + 4.679 * 0.019305 - 0.327 * 1.0315 = -2.37

* 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 (Mar23) TTM: Last Year (Mar22) TTM: Total Receivables was \$7,885 Mil. Revenue was \$16,481 Mil. Gross Profit was \$16,481 Mil. Total Current Assets was \$27,767 Mil. Total Assets was \$238,067 Mil. Property, Plant and Equipment(Net PPE) was \$1,333 Mil. Depreciation, Depletion and Amortization(DDA) was \$200 Mil. Selling, General, & Admin. Expense(SGA) was \$3,794 Mil. Total Current Liabilities was \$6,203 Mil. Long-Term Debt & Capital Lease Obligation was \$21,115 Mil. Net Income was \$4,137 Mil. Gross Profit was \$0 Mil. Cash Flow from Operations was \$-458 Mil. Total Receivables was \$7,762 Mil. Revenue was \$15,273 Mil. Gross Profit was \$15,273 Mil. Total Current Assets was \$35,791 Mil. Total Assets was \$230,036 Mil. Property, Plant and Equipment(Net PPE) was \$1,392 Mil. Depreciation, Depletion and Amortization(DDA) was \$194 Mil. Selling, General, & Admin. Expense(SGA) was \$3,518 Mil. Total Current Liabilities was \$5,973 Mil. Long-Term Debt & Capital Lease Obligation was \$19,618 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) = (7884.842 / 16480.725) / (7761.517 / 15272.948) = 0.478428 / 0.508187 = 0.9414

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) = (15272.948 / 15272.948) / (16480.725 / 16480.725) = 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 - (27767.464 + 1333.35) / 238066.588) / (1 - (35790.993 + 1391.976) / 230036.302) = 0.877762 / 0.83836 = 1.047

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 = 16480.725 / 15272.948 = 1.0791

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)) = (194.181 / (194.181 + 1391.976)) / (200.031 / (200.031 + 1333.35)) = 0.122422 / 0.130451 = 0.9385

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) = (3794.213 / 16480.725) / (3517.875 / 15272.948) = 0.230221 / 0.230334 = 0.9995

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) = ((21115.175 + 6202.776) / 238066.588) / ((19617.758 + 5972.859) / 230036.302) = 0.114749 / 0.111246 = 1.0315

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 = (4137.363 - 0 - -458.412) / 238066.588 = 0.019305

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.

ICICI Bank has a M-score of -2.37 suggests that the company is unlikely to be a manipulator.

## ICICI Bank Beneish M-Score Related Terms

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