Pathward Financial 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 Pathward Financial 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 * 0.9341 | + | 0.528 * 1 | + | 0.404 * 1.0025 | + | 0.892 * 1.0908 | + | 0.115 * 1.0936 |
| - | 0.172 * SGAI | + | 4.679 * TATA | - | 0.327 * LVGI |
| - | 0.172 * 0.9642 | + | 4.679 * -0.021795 | - | 0.327 * 0.8922 |
| = | -2.51 |
* 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 €181.6 Mil.
Revenue was 186.641 + 117.368 + 123.135 + 126.349 = €553.5 Mil.
Gross Profit was 186.641 + 117.368 + 123.135 + 126.349 = €553.5 Mil.
Total Current Assets was €0.0 Mil.
Total Assets was €6,842.1 Mil.
Property, Plant and Equipment(Net PPE) was €232.9 Mil.
Depreciation, Depletion and Amortization(DDA) was €55.5 Mil.
Selling, General, & Admin. Expense(SGA) was €179.7 Mil.
Total Current Liabilities was €0.0 Mil.
Long-Term Debt & Capital Lease Obligation was €30.7 Mil.
Net Income was 60.047 + 25.361 + 33.644 + 41.624 = €160.7 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = €0.0 Mil.
Cash Flow from Operations was 177.52 + 20.581 + 107.251 + 4.449 = €309.8 Mil.
|
Total Receivables was €178.2 Mil.
Revenue was 179.378 + 110.466 + 108.518 + 109.054 = €507.4 Mil.
Gross Profit was 179.378 + 110.466 + 108.518 + 109.054 = €507.4 Mil.
Total Current Assets was €0.0 Mil.
Total Assets was €6,415.0 Mil.
Property, Plant and Equipment(Net PPE) was €234.0 Mil.
Depreciation, Depletion and Amortization(DDA) was €62.4 Mil.
Selling, General, & Admin. Expense(SGA) was €170.9 Mil.
Total Current Liabilities was €0.0 Mil.
Long-Term Debt & Capital Lease Obligation was €32.3 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) |
| = | (181.57 / 553.493) | / | (178.203 / 507.416) |
| = | 0.328044 | / | 0.351197 |
| | = | 0.9341 |
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) |
| = | (507.416 / 507.416) | / | (553.493 / 553.493) |
| = | 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 + 232.899) / 6842.148) | / | (1 - (0 + 234.041) / 6414.951) |
| = | 0.965961 | / | 0.963516 |
| | = | 1.0025 |
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 |
| = | 553.493 | / | 507.416 |
| | = | 1.0908 |
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)) |
| = | (62.37 / (62.37 + 234.041)) | / | (55.485 / (55.485 + 232.899)) |
| = | 0.210417 | / | 0.1924 |
| | = | 1.0936 |
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) |
| = | (179.711 / 553.493) | / | (170.863 / 507.416) |
| = | 0.324685 | / | 0.336732 |
| | = | 0.9642 |
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) |
| = | ((30.703 + 0) / 6842.148) | / | ((32.263 + 0) / 6414.951) |
| = | 0.004487 | / | 0.005029 |
| | = | 0.8922 |
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 |
| = | (160.676 - 0 | - | 309.801) | / | 6842.148 |
| | = | -0.021795 |
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.
Pathward Financial has a M-score of -2.51 suggests that the company is unlikely to be a manipulator.
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
Portfolio Contest
FRA:FM7 has been successfully added to your