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# Big 8 Split (TSX:BIG.PR.D.PFD) Beneish M-Score

: 0.00 (As of Today)
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Note: Financial institutions were excluded from the sample in Beneish paper when calculating Beneish M-Score. Thus, the prediction might not fit banks and insurance companies.

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

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 historical rank and industry rank for Big 8 Split's Beneish M-Score or its related term are showing as below:

During the past 9 years, the highest Beneish M-Score of Big 8 Split was 0.00. The lowest was 0.00. And the median was 0.00.

## Big 8 Split 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 Big 8 Split 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 * 2.3973 + 0.528 * 1 + 0.404 * 0.9977 + 0.892 * 0.3961 + 0.115 * 1 - 0.172 * SGAI + 4.679 * TATA - 0.327 * LVGI - 0.172 * 2.3143 + 4.679 * 0.0247 - 0.327 * 1.2726 = -1.93

* 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 (Dec17) TTM: Last Year (Dec16) TTM: Total Receivables was C\$0.09 Mil. Revenue was C\$2.61 Mil. Gross Profit was C\$2.61 Mil. Total Current Assets was C\$0.36 Mil. Total Assets was C\$25.71 Mil. Property, Plant and Equipment(Net PPE) was C\$0.00 Mil. Depreciation, Depletion and Amortization(DDA) was C\$0.00 Mil. Selling, General, & Admin. Expense(SGA) was C\$0.21 Mil. Total Current Liabilities was C\$0.25 Mil. Long-Term Debt & Capital Lease Obligation was C\$0.00 Mil. Net Income was C\$2.26 Mil. Gross Profit was C\$0.00 Mil. Cash Flow from Operations was C\$1.62 Mil. Total Receivables was C\$0.10 Mil. Revenue was C\$6.59 Mil. Gross Profit was C\$6.59 Mil. Total Current Assets was C\$0.34 Mil. Total Assets was C\$28.58 Mil. Property, Plant and Equipment(Net PPE) was C\$0.00 Mil. Depreciation, Depletion and Amortization(DDA) was C\$0.00 Mil. Selling, General, & Admin. Expense(SGA) was C\$0.23 Mil. Total Current Liabilities was C\$0.22 Mil. Long-Term Debt & Capital Lease Obligation was C\$0.00 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) = (0.094 / 2.611) / (0.099 / 6.592) = 0.036002 / 0.015018 = 2.3973

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) = (6.592 / 6.592) / (2.611 / 2.611) = 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 - (0.36 + 0) / 25.709) / (1 - (0.336 + 0) / 28.579) = 0.985997 / 0.988243 = 0.9977

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 = 2.611 / 6.592 = 0.3961

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)) = (0 / (0 + 0)) / (0 / (0 + 0)) = / = 1

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) = (0.209 / 2.611) / (0.228 / 6.592) = 0.080046 / 0.034587 = 2.3143

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) = ((0 + 0.253) / 25.709) / ((0 + 0.221) / 28.579) = 0.009841 / 0.007733 = 1.2726

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 = (2.258 - 0 - 1.623) / 25.709 = 0.0247

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.

Big 8 Split has a M-score of -1.93 suggests that the company is unlikely to be a manipulator.

## Big 8 Split Beneish M-Score Related Terms

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## Big 8 Split (TSX:BIG.PR.D.PFD) Business Description

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