Tompkins Financial 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 Tompkins Financial 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 * 1.3446 | + | 0.528 * 1 | + | 0.404 * 1.0356 | + | 0.892 * 0.7097 | + | 0.115 * 0.9611 |
| - | 0.172 * SGAI | + | 4.679 * TATA | - | 0.327 * LVGI |
| - | 0.172 * 1.4362 | + | 4.679 * -0.010166 | - | 0.327 * 2.0275 |
| = | -2.87 |
* 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 $15.3 Mil.
Revenue was 70.163 + 8.33 + 63.395 + 73.63 = $215.5 Mil.
Gross Profit was 70.163 + 8.33 + 63.395 + 73.63 = $215.5 Mil.
Total Current Assets was $1,511.5 Mil.
Total Assets was $7,819.7 Mil.
Property, Plant and Equipment(Net PPE) was $79.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $11.7 Mil.
Selling, General, & Admin. Expense(SGA) was $134.3 Mil.
Total Current Liabilities was $477.1 Mil.
Long-Term Debt & Capital Lease Obligation was $125.0 Mil.
Net Income was 15.003 + -33.354 + 8.475 + 19.381 = $9.5 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was 18.931 + 25.323 + 21.991 + 22.758 = $89.0 Mil.
|
Total Receivables was $16.0 Mil.
Revenue was 74.636 + 77.674 + 75.926 + 75.458 = $303.7 Mil.
Gross Profit was 74.636 + 77.674 + 75.926 + 75.458 = $303.7 Mil.
Total Current Assets was $1,688.8 Mil.
Total Assets was $7,670.7 Mil.
Property, Plant and Equipment(Net PPE) was $82.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $11.6 Mil.
Selling, General, & Admin. Expense(SGA) was $131.7 Mil.
Total Current Liabilities was $241.3 Mil.
Long-Term Debt & Capital Lease Obligation was $50.0 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) |
| = | (15.304 / 215.518) | / | (16.038 / 303.694) |
| = | 0.07101 | / | 0.05281 |
| | = | 1.3446 |
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) |
| = | (303.694 / 303.694) | / | (215.518 / 215.518) |
| = | 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 - (1511.496 + 79.687) / 7819.749) | / | (1 - (1688.842 + 82.14) / 7670.686) |
| = | 0.796517 | / | 0.769123 |
| | = | 1.0356 |
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 |
| = | 215.518 | / | 303.694 |
| | = | 0.7097 |
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)) |
| = | (11.557 / (11.557 + 82.14)) | / | (11.733 / (11.733 + 79.687)) |
| = | 0.123344 | / | 0.128342 |
| | = | 0.9611 |
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) |
| = | (134.265 / 215.518) | / | (131.736 / 303.694) |
| = | 0.622987 | / | 0.433779 |
| | = | 1.4362 |
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) |
| = | ((125 + 477.1) / 7819.749) | / | ((50 + 241.3) / 7670.686) |
| = | 0.076997 | / | 0.037976 |
| | = | 2.0275 |
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 |
| = | (9.505 - 0 | - | 89.003) | / | 7819.749 |
| | = | -0.010166 |
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.
Tompkins Financial has a M-score of -2.87 suggests that the company is unlikely to be a manipulator.
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
Portfolio Contest
TMP has been successfully added to your