The Toronto-Dominion Bank 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 The Toronto-Dominion Bank 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 * 0.8998 | + | 0.528 * 1 | + | 0.404 * 1.0001 | + | 0.892 * 1.0629 | + | 0.115 * 0.9816 |
| - | 0.172 * SGAI | + | 4.679 * TATA | - | 0.327 * LVGI |
| - | 0.172 * 1.0007 | + | 4.679 * -0.007947 | - | 0.327 * 1.0704 |
| = | -2.58 |
* 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 (Apr25) TTM: | Last Year (Apr24) TTM: |
Total Receivables was $39,666.69 Mil.
Revenue was 10731.707 + 10355.827 + 10716.726 + 10290.944 = $42,095.20 Mil.
Gross Profit was 10731.707 + 10355.827 + 10716.726 + 10290.944 = $42,095.20 Mil.
Total Current Assets was $0.00 Mil.
Total Assets was $1,476,485.23 Mil.
Property, Plant and Equipment(Net PPE) was $6,945.86 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,505.87 Mil.
Selling, General, & Admin. Expense(SGA) was $18,505.77 Mil.
Total Current Liabilities was $0.00 Mil.
Long-Term Debt & Capital Lease Obligation was $157,156.14 Mil.
Net Income was 7960.089 + 1941.066 + 2642.291 + -131.982 = $12,411.46 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.00 Mil.
Cash Flow from Operations was 8395.68 + -34942.665 + 57929.781 + -7237.859 = $24,144.94 Mil.
|
Total Receivables was $41,475.06 Mil.
Revenue was 10062.162 + 10162.408 + 9563.156 + 9814.548 = $39,602.27 Mil.
Gross Profit was 10062.162 + 10162.408 + 9563.156 + 9814.548 = $39,602.27 Mil.
Total Current Assets was $0.00 Mil.
Total Assets was $1,438,253.62 Mil.
Property, Plant and Equipment(Net PPE) was $6,959.92 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,475.29 Mil.
Selling, General, & Admin. Expense(SGA) was $17,398.49 Mil.
Total Current Liabilities was $0.00 Mil.
Long-Term Debt & Capital Lease Obligation was $143,015.94 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) |
| = | (39666.691 / 42095.204) | / | (41475.062 / 39602.274) |
| = | 0.942309 | / | 1.04729 |
| | = | 0.8998 |
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) |
| = | (39602.274 / 39602.274) | / | (42095.204 / 42095.204) |
| = | 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 + 6945.855) / 1476485.23) | / | (1 - (0 + 6959.924) / 1438253.62) |
| = | 0.995296 | / | 0.995161 |
| | = | 1.0001 |
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 |
| = | 42095.204 | / | 39602.274 |
| | = | 1.0629 |
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)) |
| = | (1475.293 / (1475.293 + 6959.924)) | / | (1505.866 / (1505.866 + 6945.855)) |
| = | 0.174897 | / | 0.178173 |
| | = | 0.9816 |
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) |
| = | (18505.774 / 42095.204) | / | (17398.49 / 39602.274) |
| = | 0.439617 | / | 0.439331 |
| | = | 1.0007 |
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) |
| = | ((157156.14 + 0) / 1476485.23) | / | ((143015.943 + 0) / 1438253.62) |
| = | 0.106439 | / | 0.099437 |
| | = | 1.0704 |
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 |
| = | (12411.464 - 0 | - | 24144.937) | / | 1476485.23 |
| | = | -0.007947 |
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 Toronto-Dominion Bank has a M-score of -2.58 suggests that the company is unlikely to be a manipulator.
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
Portfolio Contest
TDBKF.PFD has been successfully added to your