T-Mobile US 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 T-Mobile US 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 * 1.4744 | + | 0.528 * 1.0028 | + | 0.404 * 1.0763 | + | 0.892 * 1.52 | + | 0.115 * 0.9559 |
| - | 0.172 * SGAI | + | 4.679 * TATA | - | 0.327 * LVGI |
| - | 0.172 * 0.8806 | + | 4.679 * -0.0237 | - | 0.327 * 1.0247 |
| = | -1.65 |
* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.
| This Year (Dec20) TTM: | Last Year (Dec19) TTM: |
Accounts Receivable was $4,276 Mil.
Revenue was 20341 + 19272 + 17671 + 11113 = $68,397 Mil.
Gross Profit was 10689 + 11591 + 10906 + 6945 = $40,131 Mil.
Total Current Assets was $23,885 Mil.
Total Assets was $200,162 Mil.
Property, Plant and Equipment(Net PPE) was $72,224 Mil.
Depreciation, Depletion and Amortization(DDA) was $14,151 Mil.
Selling, General, & Admin. Expense(SGA) was $18,926 Mil.
Total Current Liabilities was $21,703 Mil.
Long-Term Debt & Capital Lease Obligation was $94,709 Mil.
Net Income was 750 + 1253 + 110 + 951 = $3,064 Mil.
Non Operating Income was -101 + -99 + -613 + -10 = $-823 Mil.
Cash Flow from Operations was 3474 + 2772 + 777 + 1617 = $8,640 Mil.
|
Accounts Receivable was $1,908 Mil.
Revenue was 11878 + 11061 + 10979 + 11080 = $44,998 Mil.
Gross Profit was 6666 + 6624 + 6669 + 6518 = $26,477 Mil.
Total Current Assets was $9,305 Mil.
Total Assets was $86,921 Mil.
Property, Plant and Equipment(Net PPE) was $35,632 Mil.
Depreciation, Depletion and Amortization(DDA) was $6,616 Mil.
Selling, General, & Admin. Expense(SGA) was $14,139 Mil.
Total Current Liabilities was $12,506 Mil.
Long-Term Debt & Capital Lease Obligation was $36,829 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) |
| = | (4276 / 68397) | / | (1908 / 44998) |
| = | 0.06251736 | / | 0.04240188 |
| | = | 1.4744 |
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) |
| = | (26477 / 44998) | / | (40131 / 68397) |
| = | 0.58840393 | / | 0.58673626 |
| | = | 1.0028 |
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 - (23885 + 72224) / 200162) | / | (1 - (9305 + 35632) / 86921) |
| = | 0.51984393 | / | 0.48301331 |
| | = | 1.0763 |
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 |
| = | 68397 | / | 44998 |
| | = | 1.52 |
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)) |
| = | (6616 / (6616 + 35632)) | / | (14151 / (14151 + 72224)) |
| = | 0.15659913 | / | 0.16383213 |
| | = | 0.9559 |
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) |
| = | (18926 / 68397) | / | (14139 / 44998) |
| = | 0.27670804 | / | 0.31421397 |
| | = | 0.8806 |
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) |
| = | ((94709 + 21703) / 200162) | / | ((36829 + 12506) / 86921) |
| = | 0.58158891 | / | 0.56758436 |
| | = | 1.0247 |
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 |
| = | (3064 - -823 | - | 8640) | / | 200162 |
| | = | -0.0237 |
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.
T-Mobile US has a M-score of -1.65 signals that the company is likely to be a manipulator.
Excel Add-In GURUF
API
My Portfolios
Create New Portfolio
Portfolio Contest
My Gurus
Personalize
My Gurus
3.61(2.95%) Volume: 5,387,430 4:00PM EST
Email Alerts
Stock PDF
RSS
Website
Filings
Manual of Stocks™ Web APP
TMUS has been successfully added to your 
