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Banco BTG Pactual S.A. (BSP:BPAC3) Beneish M-Score : -2.22 (As of Apr. 30, 2024)


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What is Banco BTG Pactual S.A. Beneish M-Score?

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.

Good Sign:

Beneish M-Score -2.22 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

The historical rank and industry rank for Banco BTG Pactual S.A.'s Beneish M-Score or its related term are showing as below:

BSP:BPAC3' s Beneish M-Score Range Over the Past 10 Years
Min: -5.1   Med: -2.22   Max: 65.09
Current: -2.22

During the past 13 years, the highest Beneish M-Score of Banco BTG Pactual S.A. was 65.09. The lowest was -5.10. And the median was -2.22.


Banco BTG Pactual S.A. 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 Banco BTG Pactual S.A. 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 * 1.012+0.892 * 1.092+0.115 * 0.9441
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0799+4.679 * 0.057963-0.327 * 1.2401
=-2.22

* 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 R$0 Mil.
Revenue was 8574.449 + 9550.058 + 7207.609 + 6774.065 = R$32,106 Mil.
Gross Profit was 8574.449 + 9550.058 + 7207.609 + 6774.065 = R$32,106 Mil.
Total Current Assets was R$36,830 Mil.
Total Assets was R$493,233 Mil.
Property, Plant and Equipment(Net PPE) was R$515 Mil.
Depreciation, Depletion and Amortization(DDA) was R$990 Mil.
Selling, General, & Admin. Expense(SGA) was R$7,270 Mil.
Total Current Liabilities was R$44,741 Mil.
Long-Term Debt & Capital Lease Obligation was R$37,702 Mil.
Net Income was 2727.547 + 2622.551 + 2441.245 + 2133.223 = R$9,925 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = R$0 Mil.
Cash Flow from Operations was -4369.854 + 2447.601 + -18446.778 + 1704.46 = R$-18,665 Mil.
Total Receivables was R$0 Mil.
Revenue was 7801.143 + 8204.378 + 6613.442 + 6781.345 = R$29,400 Mil.
Gross Profit was 7801.143 + 8204.378 + 6613.442 + 6781.345 = R$29,400 Mil.
Total Current Assets was R$38,546 Mil.
Total Assets was R$450,612 Mil.
Property, Plant and Equipment(Net PPE) was R$509 Mil.
Depreciation, Depletion and Amortization(DDA) was R$834 Mil.
Selling, General, & Admin. Expense(SGA) was R$6,165 Mil.
Total Current Liabilities was R$34,819 Mil.
Long-Term Debt & Capital Lease Obligation was R$25,914 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 / 32106.181) / (0 / 29400.308)
=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)
=(29400.308 / 29400.308) / (32106.181 / 32106.181)
=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 - (36829.523 + 515.092) / 493232.849) / (1 - (38545.629 + 508.618) / 450612.088)
=0.924286 / 0.913331
=1.012

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
=32106.181 / 29400.308
=1.092

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))
=(833.666 / (833.666 + 508.618)) / (990.46 / (990.46 + 515.092))
=0.62108 / 0.657872
=0.9441

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)
=(7270.458 / 32106.181) / (6164.998 / 29400.308)
=0.22645 / 0.209692
=1.0799

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)
=((37701.586 + 44740.866) / 493232.849) / ((25913.938 + 34819.366) / 450612.088)
=0.167147 / 0.13478
=1.2401

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
=(9924.566 - 0 - -18664.571) / 493232.849
=0.057963

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.

Banco BTG Pactual S.A. has a M-score of -2.22 suggests that the company is unlikely to be a manipulator.


Banco BTG Pactual S.A. Beneish M-Score Related Terms

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Banco BTG Pactual S.A. (BSP:BPAC3) Business Description

Traded in Other Exchanges
Address
Avenue Brigadeiro Faria Lima, 14th Floor, Sao Paulo, SP, BRA, 3477
Banco BTG Pactual S.A. is a Brazil-based banking firm. The core activities of the company involve investment banking and investment management activities. It also provides corporate lending, brokerage service, commercial, consumer, and merchant banking services. Banco BTG is one of the largest asset management firms in Latin America and has a foreign presence in countries like Mexico, the United Kingdom and the United States. Its product portfolio includes instruments like fixed income, equity, and hedge funds.