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PennyMac Financial Services Beneish M-Score

: -1.04 (As of Today)
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Warning Sign:

Beneish M-Score -1.04 higher than -2.22, which implies that it might have manipulated its financial results.

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

PennyMac Financial Services has a M-score of -1.04 signals that the company is a manipulator.

NYSE:PFSI' s Beneish M-Score Range Over the Past 10 Years
Min: -2.57   Med: -1.68   Max: -0.28
Current: -1.04
-2.57
-0.28

During the past 10 years, the highest Beneish M-Score of PennyMac Financial Services was -0.28. The lowest was -2.57. And the median was -1.68.

PennyMac Financial Services Beneish M-Score Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

PennyMac Financial Services Annual Data
Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Dec19
Beneish M-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -2.48 -1.64 -1.28 -2.48 -0.97

PennyMac Financial Services Quarterly Data
Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20
Beneish M-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -1.16 -1.16 -0.97 -0.39 -1.04
Competitive Comparison
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap.

PennyMac Financial Services Beneish M-Score Distribution

* The bar in red indicates where PennyMac Financial Services's Beneish M-Score falls into.


PennyMac 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 PennyMac Financial Services 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 * 0.5446+0.528 * 0.6906+0.404 * 1.4657+0.892 * 2.3463+0.115 * 0.8419
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.5551+4.679 * 0.0848-0.327 * 0.4489
=-1.04

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Jun20) TTM:Last Year (Jun19) TTM:
Accounts Receivable was $44 Mil.
Revenue was 821.634 + 721.825 + 490.375 + 436.347 = $2,470 Mil.
Gross Profit was 534.324 + 465.219 + 246.96 + 212.455 = $1,459 Mil.
Total Current Assets was $6,163 Mil.
Total Assets was $23,226 Mil.
Property, Plant and Equipment(Net PPE) was $74 Mil.
Depreciation, Depletion and Amortization(DDA) was $614 Mil.
Selling, General, & Admin. Expense(SGA) was $155 Mil.
Total Current Liabilities was $1,207 Mil.
Long-Term Debt & Capital Lease Obligation was $5,701 Mil.
Net Income was 352.677 + 306.243 + 152.661 + 121.473 = $933 Mil.
Non Operating Income was -11.264 + -9.94 + -9.255 + -8.934 = $-39 Mil.
Cash Flow from Operations was 1095.881 + -730.284 + -554.982 + -808.196 = $-998 Mil.
 Accounts Receivable was $35 Mil.
Revenue was 302.977 + 247.705 + 251.201 + 250.929 = $1,053 Mil.
Gross Profit was 136.181 + 96.315 + 97.394 + 99.565 = $429 Mil.
Total Current Assets was $4,120 Mil.
Total Assets was $8,398 Mil.
Property, Plant and Equipment(Net PPE) was $87 Mil.
(DDA) was $265 Mil.
Selling, General, & Admin. Expense(SGA) was $119 Mil.
Total Current Liabilities was $899 Mil.
Long-Term Debt & Capital Lease Obligation was $4,665 Mil.

1. DSRI = Days Sales in Receivables Index

Measured as the ratio of Revenue in Accounts Receivable 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)
=(44.329 / 2470.181) / (34.695 / 1052.812)
=0.01794565 / 0.0329546
=0.5446

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)
=(429.455 / 1052.812) / (1458.958 / 2470.181)
=0.40791233 / 0.59062797
=0.6906

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 - (6162.87 + 73.571) / 23226.475) / (1 - (4119.565 + 87.35) / 8398.376)
=0.7314943 / 0.49907994
=1.4657

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
=2470.181 / 1052.812
=2.3463

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))
=(264.653 / (264.653 + 87.35)) / (614.296 / (614.296 + 73.571))
=0.75184871 / 0.89304473
=0.8419

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)
=(154.91 / 2470.181) / (118.945 / 1052.812)
=0.062712 / 0.11297839
=0.5551

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)
=((5701.013 + 1207.191) / 23226.475) / ((4665.197 + 899.138) / 8398.376)
=0.297428 / 0.66254893
=0.4489

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
=(933.054 - -39.393 - -997.581) / 23226.475
=0.0848

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

PennyMac Financial Services has a M-score of -1.04 signals that the company is likely to be a manipulator.

PennyMac Financial Services Beneish M-Score Headlines

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