SoFi Technologies 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 SoFi Technologies 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 * 3.1325 | + | 0.528 * 1 | + | 0.404 * 1 | + | 0.892 * 1.3567 | + | 0.115 * 1.2056 |
| - | 0.172 * SGAI | + | 4.679 * TATA | - | 0.327 * LVGI |
| - | 0.172 * 0.9142 | + | 4.679 * 0.044724 | - | 0.327 * 0.4624 |
| = | 0.22 |
* 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 MXN12,253 Mil.
Revenue was 15310.691 + 13661.091 + 10966.743 + 9722.103 = MXN49,661 Mil.
Gross Profit was 15310.691 + 13661.091 + 10966.743 + 9722.103 = MXN49,661 Mil.
Total Current Assets was MXN0 Mil.
Total Assets was MXN756,039 Mil.
Property, Plant and Equipment(Net PPE) was MXN7,698 Mil.
Depreciation, Depletion and Amortization(DDA) was MXN3,851 Mil.
Selling, General, & Admin. Expense(SGA) was MXN26,531 Mil.
Total Current Liabilities was MXN0 Mil.
Long-Term Debt & Capital Lease Obligation was MXN56,690 Mil.
Net Income was 6933.957 + 1196.087 + 318.843 + 1461.184 = MXN9,910 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = MXN0 Mil.
Cash Flow from Operations was -4173.288 + -23108.162 + -8873.727 + 12252.152 = MXN-23,903 Mil.
|
Total Receivables was MXN2,883 Mil.
Revenue was 10198.637 + 9357.588 + 8537.971 + 8510.648 = MXN36,605 Mil.
Gross Profit was 10198.637 + 9357.588 + 8537.971 + 8510.648 = MXN36,605 Mil.
Total Current Assets was MXN0 Mil.
Total Assets was MXN510,498 Mil.
Property, Plant and Equipment(Net PPE) was MXN5,203 Mil.
Depreciation, Depletion and Amortization(DDA) was MXN3,498 Mil.
Selling, General, & Admin. Expense(SGA) was MXN21,391 Mil.
Total Current Liabilities was MXN0 Mil.
Long-Term Debt & Capital Lease Obligation was MXN82,777 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) |
| = | (12252.64 / 49660.628) | / | (2883.11 / 36604.844) |
| = | 0.246727 | / | 0.078763 |
| | = | 3.1325 |
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) |
| = | (36604.844 / 36604.844) | / | (49660.628 / 49660.628) |
| = | 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 + 7697.589) / 756038.958) | / | (1 - (0 + 5203.337) / 510498.098) |
| = | 0.989819 | / | 0.989807 |
| | = | 1 |
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 |
| = | 49660.628 | / | 36604.844 |
| | = | 1.3567 |
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)) |
| = | (3498.363 / (3498.363 + 5203.337)) | / | (3851.162 / (3851.162 + 7697.589)) |
| = | 0.402032 | / | 0.33347 |
| | = | 1.2056 |
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) |
| = | (26530.836 / 49660.628) | / | (21390.947 / 36604.844) |
| = | 0.534243 | / | 0.584375 |
| | = | 0.9142 |
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) |
| = | ((56690.172 + 0) / 756038.958) | / | ((82777.178 + 0) / 510498.098) |
| = | 0.074983 | / | 0.16215 |
| | = | 0.4624 |
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 |
| = | (9910.071 - 0 | - | -23903.025) | / | 756038.958 |
| | = | 0.044724 |
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.
SoFi Technologies has a M-score of 0.22 signals that the company is likely to be a manipulator.
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