Banco Macro 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 Macro 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 * 0.5828 | + | 0.528 * 1 | + | 0.404 * 0.9954 | + | 0.892 * 1.9263 | + | 0.115 * 0.9298 |
| - | 0.172 * SGAI | + | 4.679 * TATA | - | 0.327 * LVGI |
| - | 0.172 * 0.6381 | + | 4.679 * 0.09685 | - | 0.327 * 1.6059 |
| = | -1.73 |
* 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 ARS395,376 Mil.
Revenue was 1846562.582 + 351041.547 + 262583.358 + 166083.38 = ARS2,626,271 Mil.
Gross Profit was 1846562.582 + 351041.547 + 262583.358 + 166083.38 = ARS2,626,271 Mil.
Total Current Assets was ARS0 Mil.
Total Assets was ARS6,718,211 Mil.
Property, Plant and Equipment(Net PPE) was ARS356,787 Mil.
Depreciation, Depletion and Amortization(DDA) was ARS58,099 Mil.
Selling, General, & Admin. Expense(SGA) was ARS374,356 Mil.
Total Current Liabilities was ARS0 Mil.
Long-Term Debt & Capital Lease Obligation was ARS396,481 Mil.
Net Income was 504049.051 + 7484.647 + 44130.579 + 9763.227 = ARS565,428 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = ARS0 Mil.
Cash Flow from Operations was -152523.739 + -108387.069 + -6390.162 + 182071.883 = ARS-85,229 Mil.
|
Total Receivables was ARS352,203 Mil.
Revenue was 780702.335 + 284111.139 + 170846.909 + 127746.606 = ARS1,363,407 Mil.
Gross Profit was 780702.335 + 284111.139 + 170846.909 + 127746.606 = ARS1,363,407 Mil.
Total Current Assets was ARS0 Mil.
Total Assets was ARS6,508,794 Mil.
Property, Plant and Equipment(Net PPE) was ARS317,211 Mil.
Depreciation, Depletion and Amortization(DDA) was ARS47,485 Mil.
Selling, General, & Admin. Expense(SGA) was ARS304,557 Mil.
Total Current Liabilities was ARS0 Mil.
Long-Term Debt & Capital Lease Obligation was ARS239,194 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) |
| = | (395375.798 / 2626270.867) | / | (352203.217 / 1363406.989) |
| = | 0.150546 | / | 0.258326 |
| | = | 0.5828 |
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) |
| = | (1363406.989 / 1363406.989) | / | (2626270.867 / 2626270.867) |
| = | 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 + 356787.386) / 6718211.111) | / | (1 - (0 + 317211.464) / 6508793.934) |
| = | 0.946893 | / | 0.951264 |
| | = | 0.9954 |
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 |
| = | 2626270.867 | / | 1363406.989 |
| | = | 1.9263 |
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)) |
| = | (47485.393 / (47485.393 + 317211.464)) | / | (58098.766 / (58098.766 + 356787.386)) |
| = | 0.130205 | / | 0.140035 |
| | = | 0.9298 |
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) |
| = | (374356.267 / 2626270.867) | / | (304556.633 / 1363406.989) |
| = | 0.142543 | / | 0.223379 |
| | = | 0.6381 |
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) |
| = | ((396480.596 + 0) / 6718211.111) | / | ((239194.239 + 0) / 6508793.934) |
| = | 0.059016 | / | 0.036749 |
| | = | 1.6059 |
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 |
| = | (565427.504 - 0 | - | -85229.087) | / | 6718211.111 |
| | = | 0.09685 |
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 Macro has a M-score of -1.73 signals that the company is likely to be a manipulator.
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