GURUFOCUS.COM » STOCK LIST » Financial Services » Banks » Malaga Financial Corp (OTCPK:MLGF) » Definitions » Beneish M-Score

MLGF (Malaga Financial) Beneish M-Score : -2.32 (As of Mar. 17, 2025)


View and export this data going back to . Start your Free Trial

What is Malaga Financial Beneish M-Score?

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 -2.32 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

MLGF' s Beneish M-Score Range Over the Past 10 Years
Min: -2.51   Med: -2.4   Max: -1.78
Current: -2.32

During the past 12 years, the highest Beneish M-Score of Malaga Financial was -1.78. The lowest was -2.51. And the median was -2.40.


Malaga Financial 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 Malaga Financial 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 * 1.1229+0.528 * 1+0.404 * 1.0001+0.892 * 1.0721+0.115 * 1.0938
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9215+4.679 * 0.000384-0.327 * 1.1247
=-2.32

* 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 (Dec23) TTM:Last Year (Dec22) TTM:
Total Receivables was $4.78 Mil.
Revenue was $46.91 Mil.
Gross Profit was $46.91 Mil.
Total Current Assets was $0.00 Mil.
Total Assets was $1,474.74 Mil.
Property, Plant and Equipment(Net PPE) was $15.95 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.67 Mil.
Selling, General, & Admin. Expense(SGA) was $2.53 Mil.
Total Current Liabilities was $0.00 Mil.
Long-Term Debt & Capital Lease Obligation was $333.40 Mil.
Net Income was $22.98 Mil.
Gross Profit was $0.00 Mil.
Cash Flow from Operations was $22.41 Mil.
Total Receivables was $3.97 Mil.
Revenue was $43.75 Mil.
Gross Profit was $43.75 Mil.
Total Current Assets was $0.00 Mil.
Total Assets was $1,509.34 Mil.
Property, Plant and Equipment(Net PPE) was $16.53 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.76 Mil.
Selling, General, & Admin. Expense(SGA) was $2.56 Mil.
Total Current Liabilities was $0.00 Mil.
Long-Term Debt & Capital Lease Obligation was $303.40 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)
=(4.778 / 46.906) / (3.969 / 43.752)
=0.101863 / 0.090716
=1.1229

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)
=(43.752 / 43.752) / (46.906 / 46.906)
=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 + 15.946) / 1474.741) / (1 - (0 + 16.525) / 1509.342)
=0.989187 / 0.989052
=1.0001

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
=46.906 / 43.752
=1.0721

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))
=(0.759 / (0.759 + 16.525)) / (0.667 / (0.667 + 15.946))
=0.043913 / 0.040149
=1.0938

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)
=(2.527 / 46.906) / (2.558 / 43.752)
=0.053874 / 0.058466
=0.9215

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)
=((333.404 + 0) / 1474.741) / ((303.404 + 0) / 1509.342)
=0.226076 / 0.201017
=1.1247

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
=(22.981 - 0 - 22.414) / 1474.741
=0.000384

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.

Malaga Financial has a M-score of -2.32 suggests that the company is unlikely to be a manipulator.


Malaga Financial Beneish M-Score Related Terms

Thank you for viewing the detailed overview of Malaga Financial's Beneish M-Score provided by GuruFocus.com. Please click on the following links to see related term pages.


Malaga Financial Business Description

Traded in Other Exchanges
N/A
Address
2514 Via Tejon, Palos Verdes Estates, CA, USA, 90274
Malaga Financial Corp is a full-service community bank. It bank is a real estate lender concentrating on financing apartments, construction projects, and single-family residences. Its operations are related to traditional banking activities, including the acceptance of deposits and the lending and investing of money. Its customers consist of individuals and small-to-midsize businesses located in the Palos Verdes Peninsula and adjoining areas of Los Angeles and Orange Counties, California.