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# Mars Bancorp (OTCPK:MNBP) Beneish M-Score

: -2.97 (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 -2.97 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

MNBP' s Beneish M-Score Range Over the Past 10 Years
Min: -6.11   Med: -2.49   Max: -2.08
Current: -2.97

During the past 10 years, the highest Beneish M-Score of Mars Bancorp was -2.08. The lowest was -6.11. And the median was -2.49.

## Mars Bancorp 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 Mars Bancorp 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 * 1.0653 + 0.528 * 1 + 0.404 * 1.1349 + 0.892 * 1.061 + 0.115 * 0.9356 - 0.172 * SGAI + 4.679 * TATA - 0.327 * LVGI - 0.172 * 1.05 + 4.679 * -0.002375 - 0.327 * 2.9433 = -2.97

* 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 (Dec22) TTM: Last Year (Dec21) TTM: Total Receivables was \$2.80 Mil. Revenue was \$15.28 Mil. Gross Profit was \$15.28 Mil. Total Current Assets was \$173.10 Mil. Total Assets was \$514.57 Mil. Property, Plant and Equipment(Net PPE) was \$7.13 Mil. Depreciation, Depletion and Amortization(DDA) was \$0.47 Mil. Selling, General, & Admin. Expense(SGA) was \$9.43 Mil. Total Current Liabilities was \$3.49 Mil. Long-Term Debt & Capital Lease Obligation was \$5.38 Mil. Net Income was \$1.84 Mil. Gross Profit was \$0.00 Mil. Cash Flow from Operations was \$3.06 Mil. Total Receivables was \$2.48 Mil. Revenue was \$14.40 Mil. Gross Profit was \$14.40 Mil. Total Current Assets was \$208.56 Mil. Total Assets was \$505.15 Mil. Property, Plant and Equipment(Net PPE) was \$7.40 Mil. Depreciation, Depletion and Amortization(DDA) was \$0.45 Mil. Selling, General, & Admin. Expense(SGA) was \$8.47 Mil. Total Current Liabilities was \$2.96 Mil. Long-Term Debt & Capital Lease Obligation was \$0.00 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) = (2.802 / 15.278) / (2.479 / 14.4) = 0.183401 / 0.172153 = 1.0653

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) = (14.4 / 14.4) / (15.278 / 15.278) = 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 - (173.097 + 7.133) / 514.566) / (1 - (208.557 + 7.396) / 505.152) = 0.649744 / 0.572499 = 1.1349

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 = 15.278 / 14.4 = 1.061

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)) = (0.454 / (0.454 + 7.396)) / (0.47 / (0.47 + 7.133)) = 0.057834 / 0.061818 = 0.9356

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) = (9.432 / 15.278) / (8.467 / 14.4) = 0.617358 / 0.587986 = 1.05

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) = ((5.379 + 3.493) / 514.566) / ((0 + 2.959) / 505.152) = 0.017242 / 0.005858 = 2.9433

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 = (1.838 - 0 - 3.06) / 514.566 = -0.002375

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.

Mars Bancorp has a M-score of -2.97 suggests that the company is unlikely to be a manipulator.

## Mars Bancorp Beneish M-Score Related Terms

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