The Goldmanchs Group 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 The Goldmanchs Group 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 * 0.9941 | + | 0.528 * 1 | + | 0.404 * 1.0369 | + | 0.892 * 0.9496 | + | 0.115 * 0.4148 |
| - | 0.172 * SGAI | + | 4.679 * TATA | - | 0.327 * LVGI |
| - | 0.172 * 1.0344 | + | 4.679 * 0.012928 | - | 0.327 * 0.8485 |
| = | -2.48 |
* 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$727,998 Mil.
Revenue was 55455.936 + 58360.618 + 52881.062 + 63669.926 = R$230,368 Mil.
Gross Profit was 55455.936 + 58360.618 + 52881.062 + 63669.926 = R$230,368 Mil.
Total Current Assets was R$2,074,218 Mil.
Total Assets was R$8,043,482 Mil.
Property, Plant and Equipment(Net PPE) was R$65,731 Mil.
Depreciation, Depletion and Amortization(DDA) was R$24,078 Mil.
Selling, General, & Admin. Expense(SGA) was R$80,335 Mil.
Total Current Liabilities was R$1,603,518 Mil.
Long-Term Debt & Capital Lease Obligation was R$1,225,435 Mil.
Net Income was 9838.798 + 10163.845 + 5902.099 + 16844.612 = R$42,749 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = R$0 Mil.
Cash Flow from Operations was -138948.528 + -126104.766 + 154837.884 + 48981.674 = R$-61,234 Mil.
|
Total Receivables was R$771,215 Mil.
Revenue was 55564.522 + 62792.11 + 59885.913 + 64359.781 = R$242,602 Mil.
Gross Profit was 55564.522 + 62792.11 + 59885.913 + 64359.781 = R$242,602 Mil.
Total Current Assets was R$2,108,819 Mil.
Total Assets was R$7,562,812 Mil.
Property, Plant and Equipment(Net PPE) was R$100,953 Mil.
Depreciation, Depletion and Amortization(DDA) was R$12,631 Mil.
Selling, General, & Admin. Expense(SGA) was R$81,791 Mil.
Total Current Liabilities was R$1,789,977 Mil.
Long-Term Debt & Capital Lease Obligation was R$1,344,915 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) |
| = | (727997.584 / 230367.542) | / | (771215.426 / 242602.326) |
| = | 3.160157 | / | 3.178928 |
| | = | 0.9941 |
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) |
| = | (242602.326 / 242602.326) | / | (230367.542 / 230367.542) |
| = | 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 - (2074217.633 + 65730.817) / 8043482.279) | / | (1 - (2108818.653 + 100952.968) / 7562812.473) |
| = | 0.733952 | / | 0.707811 |
| | = | 1.0369 |
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 |
| = | 230367.542 | / | 242602.326 |
| | = | 0.9496 |
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)) |
| = | (12631.222 / (12631.222 + 100952.968)) | / | (24078.298 / (24078.298 + 65730.817)) |
| = | 0.111206 | / | 0.268105 |
| | = | 0.4148 |
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) |
| = | (80334.718 / 230367.542) | / | (81790.869 / 242602.326) |
| = | 0.348724 | / | 0.33714 |
| | = | 1.0344 |
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) |
| = | ((1225435.08 + 1603518.347) / 8043482.279) | / | ((1344915.314 + 1789977.013) / 7562812.473) |
| = | 0.351708 | / | 0.414514 |
| | = | 0.8485 |
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 |
| = | (42749.354 - 0 | - | -61233.736) | / | 8043482.279 |
| | = | 0.012928 |
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 Goldmanchs Group has a M-score of -2.48 suggests that the company is unlikely to be a manipulator.
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
Portfolio Contest
BSP:GSGI34 has been successfully added to your