Citigroup 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 Citigroup 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 * 1.117 | + | 0.528 * 1 | + | 0.404 * 0.999 | + | 0.892 * 1.1067 | + | 0.115 * 1.0683 |
| - | 0.172 * SGAI | + | 4.679 * TATA | - | 0.327 * LVGI |
| - | 0.172 * 1.0225 | + | 4.679 * 0.024086 | - | 0.327 * 1.0303 |
| = | -2.17 |
* 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 円9,227,028 Mil.
Revenue was 3160273.525 + 2712611.471 + 2919347.374 + 2748001.479 = 円11,540,234 Mil.
Gross Profit was 3160273.525 + 2712611.471 + 2919347.374 + 2748001.479 = 円11,540,234 Mil.
Total Current Assets was 円0 Mil.
Total Assets was 円364,435,240 Mil.
Property, Plant and Equipment(Net PPE) was 円4,372,905 Mil.
Depreciation, Depletion and Amortization(DDA) was 円664,319 Mil.
Selling, General, & Admin. Expense(SGA) was 円4,482,941 Mil.
Total Current Liabilities was 円0 Mil.
Long-Term Debt & Capital Lease Obligation was 円42,772,461 Mil.
Net Income was 505038.497 + -264781.98 + 524258.371 + 412058.864 = 円1,176,574 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = 円0 Mil.
Cash Flow from Operations was -1622685.245 + -671817.682 + 2335063.933 + -7641677.57 = 円-7,601,117 Mil.
|
Total Receivables was 円7,463,681 Mil.
Revenue was 2727420.05 + 2515621.346 + 2562496.421 + 2621634.391 = 円10,427,172 Mil.
Gross Profit was 2727420.05 + 2515621.346 + 2562496.421 + 2621634.391 = 円10,427,172 Mil.
Total Current Assets was 円0 Mil.
Total Assets was 円328,160,962 Mil.
Property, Plant and Equipment(Net PPE) was 円3,624,842 Mil.
Depreciation, Depletion and Amortization(DDA) was 円594,459 Mil.
Selling, General, & Admin. Expense(SGA) was 円3,961,541 Mil.
Total Current Liabilities was 円0 Mil.
Long-Term Debt & Capital Lease Obligation was 円37,383,766 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) |
| = | (9227027.869 / 11540233.849) | / | (7463680.87 / 10427172.208) |
| = | 0.799553 | / | 0.715791 |
| | = | 1.117 |
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) |
| = | (10427172.208 / 10427172.208) | / | (11540233.849 / 11540233.849) |
| = | 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 + 4372905.264) / 364435239.989) | / | (1 - (0 + 3624842.163) / 328160961.545) |
| = | 0.988001 | / | 0.988954 |
| | = | 0.999 |
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 |
| = | 11540233.849 | / | 10427172.208 |
| | = | 1.1067 |
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)) |
| = | (594459.496 / (594459.496 + 3624842.163)) | / | (664318.911 / (664318.911 + 4372905.264)) |
| = | 0.14089 | / | 0.131882 |
| | = | 1.0683 |
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) |
| = | (4482941.243 / 11540233.849) | / | (3961540.864 / 10427172.208) |
| = | 0.388462 | / | 0.379925 |
| | = | 1.0225 |
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) |
| = | ((42772460.89 + 0) / 364435239.989) | / | ((37383766.193 + 0) / 328160961.545) |
| = | 0.117366 | / | 0.113919 |
| | = | 1.0303 |
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 |
| = | (1176573.752 - 0 | - | -7601116.564) | / | 364435239.989 |
| | = | 0.024086 |
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.
Citigroup has a M-score of -2.17 suggests that the company is unlikely to be a manipulator.
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
Portfolio Contest
TSE:8710 has been successfully added to your