Malaga Financial (Malaga Financial) Beneish M-Score : 0.00 (As of May. 30, 2024)

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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.

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

During the past 5 years, the highest Beneish M-Score of Malaga Financial was 0.00. The lowest was 0.00. And the median was 0.00.

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:

-4.84

0.92 * DSRI

0.528 * GMI

0.404 * AQI

0.892 * SGI

0.115 * DEPI

-4.84

0.92 * 1.0862

0.528 * 1

0.404 * 1.0005

0.892 * 1.3217

0.115 * 1

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 0.9276

4.679 * 0.00833

0.327 * 1.044

-2.08

* 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 (Dec06) TTM:

Last Year (Dec05) TTM:

Total Receivables was $3.27 Mil.
Revenue was $16.34 Mil.
Gross Profit was $16.34 Mil.
Total Current Assets was $0.00 Mil.
Total Assets was $669.74 Mil.
Property, Plant and Equipment(Net PPE) was $2.07 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.00 Mil.
Selling, General, & Admin. Expense(SGA) was $4.39 Mil.
Total Current Liabilities was $0.00 Mil.
Long-Term Debt & Capital Lease Obligation was $251.04 Mil.
Net Income was $5.58 Mil.
Gross Profit was $0.00 Mil.
Cash Flow from Operations was $0.00 Mil.

Total Receivables was $2.28 Mil.
Revenue was $12.36 Mil.
Gross Profit was $12.36 Mil.
Total Current Assets was $0.00 Mil.
Total Assets was $580.54 Mil.
Property, Plant and Equipment(Net PPE) was $2.09 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.00 Mil.
Selling, General, & Admin. Expense(SGA) was $3.58 Mil.
Total Current Liabilities was $0.00 Mil.
Long-Term Debt & Capital Lease Obligation was $208.44 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)
	=	(3.273 / 16.337)	/	(2.28 / 12.361)
	=	0.200343	/	0.184451
	=	1.0862

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)
	=	(12.361 / 12.361)	/	(16.337 / 16.337)
	=	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 + 2.066) / 669.742)	/	(1 - (0 + 2.092) / 580.542)
	=	0.996915	/	0.996396
	=	1.0005

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
	=	16.337	/	12.361
	=	1.3217

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 / (0 + 2.092))	/	(0 / (0 + 2.066))
	=	0	/	0
	=	1

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)
	=	(4.394 / 16.337)	/	(3.584 / 12.361)
	=	0.26896	/	0.289944
	=	0.9276

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)
	=	((251.037 + 0) / 669.742)	/	((208.44 + 0) / 580.542)
	=	0.374826	/	0.359044
	=	1.044

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
	=	(5.579 - 0	-	0)	/	669.742
	=	0.00833

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 -2.08 suggests that the company is unlikely to be a manipulator.

Malaga Financial Beneish M-Score Related Terms

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Malaga Financial (Malaga Financial) Business Description

Industry

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

Comparable Companies

Traded in Other Exchanges

N/A

Address

2514 Via Tejon, Palos Verdes Estates, CA, USA, 90274

Website

https://www.malagabank.com

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.