Scotiabank Chile 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 Scotiabank Chile 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 | + | 0.528 * 1 | + | 0.404 * 1.0007 | + | 0.892 * 0.9014 | + | 0.115 * 0.8693 |
| - | 0.172 * SGAI | + | 4.679 * TATA | - | 0.327 * LVGI |
| - | 0.172 * 1.1606 | + | 4.679 * 0.017356 | - | 0.327 * 1.0634 |
| = | -2.55 |
* 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 (Mar24) TTM: | Last Year (Mar23) TTM: |
Total Receivables was CLP0 Mil.
Revenue was 517153 + 595704 + 409139 + 519879 = CLP2,041,875 Mil.
Gross Profit was 517153 + 595704 + 409139 + 519879 = CLP2,041,875 Mil.
Total Current Assets was CLP0 Mil.
Total Assets was CLP47,533,139 Mil.
Property, Plant and Equipment(Net PPE) was CLP239,913 Mil.
Depreciation, Depletion and Amortization(DDA) was CLP68,282 Mil.
Selling, General, & Admin. Expense(SGA) was CLP198,914 Mil.
Total Current Liabilities was CLP0 Mil.
Long-Term Debt & Capital Lease Obligation was CLP12,464,646 Mil.
Net Income was 113919 + 120272 + 92887 + 123120 = CLP450,198 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = CLP0 Mil.
Cash Flow from Operations was -6281 + 70561 + -321078 + -117968 = CLP-374,766 Mil.
|
Total Receivables was CLP0 Mil.
Revenue was 460943 + 553091 + 599466 + 651848 = CLP2,265,348 Mil.
Gross Profit was 460943 + 553091 + 599466 + 651848 = CLP2,265,348 Mil.
Total Current Assets was CLP0 Mil.
Total Assets was CLP45,724,592 Mil.
Property, Plant and Equipment(Net PPE) was CLP261,723 Mil.
Depreciation, Depletion and Amortization(DDA) was CLP62,432 Mil.
Selling, General, & Admin. Expense(SGA) was CLP190,151 Mil.
Total Current Liabilities was CLP0 Mil.
Long-Term Debt & Capital Lease Obligation was CLP11,275,949 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 / 2041875) | / | (0 / 2265348) |
| = | 0 | / | 0 |
| | = | 1 |
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) |
| = | (2265348 / 2265348) | / | (2041875 / 2041875) |
| = | 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 + 239913) / 47533139) | / | (1 - (0 + 261723) / 45724592) |
| = | 0.994953 | / | 0.994276 |
| | = | 1.0007 |
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 |
| = | 2041875 | / | 2265348 |
| | = | 0.9014 |
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)) |
| = | (62432 / (62432 + 261723)) | / | (68282 / (68282 + 239913)) |
| = | 0.192599 | / | 0.221555 |
| | = | 0.8693 |
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) |
| = | (198914 / 2041875) | / | (190151 / 2265348) |
| = | 0.097417 | / | 0.083939 |
| | = | 1.1606 |
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) |
| = | ((12464646 + 0) / 47533139) | / | ((11275949 + 0) / 45724592) |
| = | 0.262231 | / | 0.246606 |
| | = | 1.0634 |
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 |
| = | (450198 - 0 | - | -374766) | / | 47533139 |
| | = | 0.017356 |
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.
Scotiabank Chile has a M-score of -2.55 suggests that the company is unlikely to be a manipulator.
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