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GuruFocus has detected 1 Warning Sign with Stoneridge Inc $SRI.
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Stoneridge Inc (NYSE:SRI)
Beneish M-Score
-1.78 (As of Today)

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.

Stoneridge Inc has a M-score of -1.78 signals that the company is a manipulator.

SRI' s Beneish M-Score Range Over the Past 10 Years
Min: -5.54   Max: -1.69
Current: -1.78

-5.54
-1.69

During the past 13 years, the highest Beneish M-Score of Stoneridge Inc was -1.69. The lowest was -5.54. And the median was -2.75.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (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 Stoneridge Inc 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 * 1.0937+0.528 * 0.9661+0.404 * 2.0517+0.892 * 1.1444+0.115 * 0.9711
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9919+4.679 * 0.0132-0.327 * 0.9314
=-1.78

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

This Year (Mar17) TTM:Last Year (Mar16) TTM:
Accounts Receivable was $141.0 Mil.
Revenue was 204.311 + 172.612 + 173.846 + 186.903 = $737.7 Mil.
Gross Profit was 61.151 + 47.779 + 49.748 + 52.751 = $211.4 Mil.
Total Current Assets was $283.1 Mil.
Total Assets was $519.5 Mil.
Property, Plant and Equipment(Net PPE) was $101.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $20.5 Mil.
Selling, General & Admin. Expense(SGA) was $119.6 Mil.
Total Current Liabilities was $133.2 Mil.
Long-Term Debt was $148.3 Mil.
Net Income was 9.203 + 48.367 + 10.284 + 11.571 = $79.4 Mil.
Non Operating Income was -2.83 + 0.055 + 0.804 + 0.559 = $-1.4 Mil.
Cash Flow from Operations was 9.81 + 28.26 + 19.223 + 16.662 = $74.0 Mil.
Accounts Receivable was $112.6 Mil.
Revenue was 162.616 + 154.641 + 162.057 + 165.289 = $644.6 Mil.
Gross Profit was 45.161 + 42.239 + 45.145 + 45.946 = $178.5 Mil.
Total Current Assets was $255.3 Mil.
Total Assets was $393.7 Mil.
Property, Plant and Equipment(Net PPE) was $88.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $17.3 Mil.
Selling, General & Admin. Expense(SGA) was $105.4 Mil.
Total Current Liabilities was $124.9 Mil.
Long-Term Debt was $104.2 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in 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)
=(140.994 / 737.672) / (112.649 / 644.603)
=0.19113373 / 0.17475718
=1.0937

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)
=(178.491 / 644.603) / (211.429 / 737.672)
=0.27690067 / 0.28661655
=0.9661

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 plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (283.113 + 101.454) / 519.546) / (1 - (255.307 + 88.563) / 393.726)
=0.25980183 / 0.12662613
=2.0517

4. SGI = Sales Growth Index

Ratio of sales 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
=737.672 / 644.603
=1.1444

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation 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))
=(17.293 / (17.293 + 88.563)) / (20.519 / (20.519 + 101.454))
=0.16336344 / 0.16822575
=0.9711

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses 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)
=(119.639 / 737.672) / (105.401 / 644.603)
=0.16218455 / 0.16351305
=0.9919

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$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((148.341 + 133.218) / 519.546) / ((104.206 + 124.887) / 393.726)
=0.54193276 / 0.58185896
=0.9314

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
=(79.425 - -1.412 - 73.955) / 519.546
=0.0132

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.

Stoneridge Inc has a M-score of -1.78 signals that the company is likely to be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

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

Stoneridge Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.11410.76261.33370.94431.31330.71080.93581.01261.03051.105
GMI 0.97211.04411.19310.81211.18890.80121.00380.88810.97830.9774
AQI 0.95420.41451.44171.03671.66951.04670.85070.73040.75871.2185
SGI 1.0261.03520.63131.33691.20491.22621.00990.77610.87651.0793
DEPI 0.79691.01871.11741.0721.51970.67930.93180.79511.43281.0144
SGAI 1.04830.98661.190.88920.87321.24520.94170.89310.9750.933
LVGI 0.94621.20841.03210.97810.86670.89071.01941.00591.00720.8158
TATA -0.0512-0.4002-0.0253-0.0347-0.0386-0.1114-0.0319-0.1418-0.08460.0351
M-score -2.64-4.82-2.37-2.44-1.69-3.19-2.74-3.51-3.02-2.00

Stoneridge Inc Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 1.01261.08121.45111.23141.03051.0181.09611.05241.1051.0937
GMI 0.88810.83170.87530.93710.97831.01670.99470.97620.97740.9661
AQI 0.73040.66320.78990.62780.75870.83020.85720.99851.21852.0517
SGI 0.77610.6980.76660.81650.87650.97361.00141.0321.07931.1444
DEPI 0.79510.84671.11621.17781.43281.54341.36481.5221.01440.9711
SGAI 0.89310.8720.72140.57680.9750.96091.07151.24660.9330.9919
LVGI 1.00591.03910.99561.04521.00720.96470.94770.88660.81580.9314
TATA -0.1418-0.1847-0.097-0.1113-0.0846-0.0708-0.082-0.08640.03510.0132
M-score -3.51-3.77-2.82-3.06-3.02-2.80-2.79-2.77-2.00-1.78
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