Huntington Bancshares 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 Huntington Bancshares 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 * 1.2502 | + | 0.528 * 1 | + | 0.404 * 1.0006 | + | 0.892 * 1.0913 | + | 0.115 * 1.2365 |
| - | 0.172 * SGAI | + | 4.679 * TATA | - | 0.327 * LVGI |
| - | 0.172 * 0.9923 | + | 4.679 * 0.000295 | - | 0.327 * 1.225 |
| = | -2.21 |
* 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 (Dec24) TTM: | Last Year (Dec23) TTM: |
Total Receivables was MXN158,086 Mil.
Revenue was 40752.038 + 36899.622 + 33031.146 + 29109.831 = MXN139,793 Mil.
Gross Profit was 40752.038 + 36899.622 + 33031.146 + 29109.831 = MXN139,793 Mil.
Total Current Assets was MXN0 Mil.
Total Assets was MXN4,259,360 Mil.
Property, Plant and Equipment(Net PPE) was MXN22,232 Mil.
Depreciation, Depletion and Amortization(DDA) was MXN11,578 Mil.
Selling, General, & Admin. Expense(SGA) was MXN55,391 Mil.
Total Current Liabilities was MXN0 Mil.
Long-Term Debt & Capital Lease Obligation was MXN341,491 Mil.
Net Income was 11053.521 + 10179.885 + 8683.729 + 6953.831 = MXN36,871 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = MXN0 Mil.
Cash Flow from Operations was 30949.859 + -8624.351 + 5587.631 + 7700.662 = MXN35,614 Mil.
|
Total Receivables was MXN115,866 Mil.
Revenue was 29212.681 + 32695.27 + 31561.92 + 34626.025 = MXN128,096 Mil.
Gross Profit was 29212.681 + 32695.27 + 31561.92 + 34626.025 = MXN128,096 Mil.
Total Current Assets was MXN0 Mil.
Total Assets was MXN3,214,379 Mil.
Property, Plant and Equipment(Net PPE) was MXN18,824 Mil.
Depreciation, Depletion and Amortization(DDA) was MXN13,824 Mil.
Selling, General, & Admin. Expense(SGA) was MXN51,149 Mil.
Total Current Liabilities was MXN0 Mil.
Long-Term Debt & Capital Lease Obligation was MXN210,379 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) |
| = | (158086.206 / 139792.637) | / | (115866.217 / 128095.896) |
| = | 1.130862 | / | 0.904527 |
| | = | 1.2502 |
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) |
| = | (128095.896 / 128095.896) | / | (139792.637 / 139792.637) |
| = | 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 + 22232.176) / 4259359.608) | / | (1 - (0 + 18824.441) / 3214379.393) |
| = | 0.99478 | / | 0.994144 |
| | = | 1.0006 |
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 |
| = | 139792.637 | / | 128095.896 |
| | = | 1.0913 |
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)) |
| = | (13824.082 / (13824.082 + 18824.441)) | / | (11578.067 / (11578.067 + 22232.176)) |
| = | 0.423421 | / | 0.342443 |
| | = | 1.2365 |
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) |
| = | (55390.973 / 139792.637) | / | (51149.266 / 128095.896) |
| = | 0.396237 | / | 0.399304 |
| | = | 0.9923 |
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) |
| = | ((341491.232 + 0) / 4259359.608) | / | ((210378.83 + 0) / 3214379.393) |
| = | 0.080174 | / | 0.065449 |
| | = | 1.225 |
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 |
| = | (36870.966 - 0 | - | 35613.801) | / | 4259359.608 |
| | = | 0.000295 |
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.
Huntington Bancshares has a M-score of -2.21 suggests that the company is unlikely to be a manipulator.
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