Main Street Financial Services (Main Street Financial Services) Beneish M-Score : -2.50 (As of Jun. 24, 2024)

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What is Main Street Financial Services 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 -2.5 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

MSWV' s Beneish M-Score Range Over the Past 10 Years
Min: -2.5 Med: -2.4 Max: -1.93
Current: -2.5

During the past 7 years, the highest Beneish M-Score of Main Street Financial Services was -1.93. The lowest was -2.50. And the median was -2.40.

Main Street Financial Services 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 Main Street Financial Services 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 * 1.2969

0.528 * 1

0.404 * 1.0006

0.892 * 0.97

0.115 * 0.9888

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 1

4.679 * 3.3E-5

0.327 * 1.8134

-2.50

* 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 $2.82 Mil.
Revenue was $19.47 Mil.
Gross Profit was $19.47 Mil.
Total Current Assets was $0.00 Mil.
Total Assets was $604.86 Mil.
Property, Plant and Equipment(Net PPE) was $5.59 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.37 Mil.
Selling, General, & Admin. Expense(SGA) was $0.00 Mil.
Total Current Liabilities was $0.00 Mil.
Long-Term Debt & Capital Lease Obligation was $35.59 Mil.
Net Income was $5.68 Mil.
Gross Profit was $0.00 Mil.
Cash Flow from Operations was $5.66 Mil.

Total Receivables was $2.24 Mil.
Revenue was $20.07 Mil.
Gross Profit was $20.07 Mil.
Total Current Assets was $0.00 Mil.
Total Assets was $603.79 Mil.
Property, Plant and Equipment(Net PPE) was $5.96 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.39 Mil.
Selling, General, & Admin. Expense(SGA) was $0.00 Mil.
Total Current Liabilities was $0.00 Mil.
Long-Term Debt & Capital Lease Obligation was $19.59 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)
	=	(2.823 / 19.471)	/	(2.244 / 20.073)
	=	0.144985	/	0.111792
	=	1.2969

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)
	=	(20.073 / 20.073)	/	(19.471 / 19.471)
	=	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 + 5.589) / 604.86)	/	(1 - (0 + 5.963) / 603.785)
	=	0.99076	/	0.990124
	=	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
	=	19.471	/	20.073
	=	0.97

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))
	=	(0.389 / (0.389 + 5.963))	/	(0.369 / (0.369 + 5.589))
	=	0.061241	/	0.061934
	=	0.9888

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)
	=	(0 / 19.471)	/	(0 / 20.073)
	=	0	/	0
	=	1

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)
	=	((35.593 + 0) / 604.86)	/	((19.593 + 0) / 603.785)
	=	0.058845	/	0.03245
	=	1.8134

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
	=	(5.682 - 0	-	5.662)	/	604.86
	=	3.3E-5

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.

Main Street Financial Services has a M-score of -2.50 suggests that the company is unlikely to be a manipulator.

Main Street Financial Services Beneish M-Score Related Terms

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Main Street Financial Services (Main Street Financial Services) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Banks » Main Street Financial Services Corp (OTCPK:MSWV) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

N/A

Address

2001 Main Street, Suite 100, Celoron Plaza, Wheeling, WV, USA, 26003

Website

https://www.mymainstreetbank.com

Main Street Financial Services Corp is a U.S based community bank. It is engaged in providing financial products and services which include ATM, Business Money Market, Drive-thru Services, Internet Banking, Safe Deposit Boxes and Non-profit Accounts among others.