Inter 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 Inter 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 * 1.6671 | + | 0.528 * 1 | + | 0.404 * 1.0008 | + | 0.892 * 1.3919 | + | 0.115 * 1.0214 |
| - | 0.172 * SGAI | + | 4.679 * TATA | - | 0.327 * LVGI |
| - | 0.172 * 0.7342 | + | 4.679 * -0.086016 | - | 0.327 * 0.9486 |
| = | -1.85 |
* 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 €194.1 Mil.
Revenue was 258.819 + 245.716 + 240.097 + 218.695 = €963.3 Mil.
Gross Profit was 258.819 + 245.716 + 240.097 + 218.695 = €963.3 Mil.
Total Current Assets was €0.0 Mil.
Total Assets was €11,555.3 Mil.
Property, Plant and Equipment(Net PPE) was €34.6 Mil.
Depreciation, Depletion and Amortization(DDA) was €31.0 Mil.
Selling, General, & Admin. Expense(SGA) was €421.2 Mil.
Total Current Liabilities was €0.0 Mil.
Long-Term Debt & Capital Lease Obligation was €1,566.4 Mil.
Net Income was 33.77 + 28.241 + 17.32 + 9.27 = €88.6 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = €0.0 Mil.
Cash Flow from Operations was -209.22 + 296.482 + 347.628 + 647.653 = €1,082.5 Mil.
|
Total Receivables was €83.6 Mil.
Revenue was 183.643 + 180.301 + 163.782 + 164.364 = €692.1 Mil.
Gross Profit was 183.643 + 180.301 + 163.782 + 164.364 = €692.1 Mil.
Total Current Assets was €0.0 Mil.
Total Assets was €8,553.7 Mil.
Property, Plant and Equipment(Net PPE) was €32.4 Mil.
Depreciation, Depletion and Amortization(DDA) was €30.3 Mil.
Selling, General, & Admin. Expense(SGA) was €412.2 Mil.
Total Current Liabilities was €0.0 Mil.
Long-Term Debt & Capital Lease Obligation was €1,222.3 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) |
| = | (194.096 / 963.327) | / | (83.643 / 692.09) |
| = | 0.201485 | / | 0.120856 |
| | = | 1.6671 |
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) |
| = | (692.09 / 692.09) | / | (963.327 / 963.327) |
| = | 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 + 34.562) / 11555.251) | / | (1 - (0 + 32.443) / 8553.704) |
| = | 0.997009 | / | 0.996207 |
| | = | 1.0008 |
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 |
| = | 963.327 | / | 692.09 |
| | = | 1.3919 |
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)) |
| = | (30.303 / (30.303 + 32.443)) | / | (31 / (31 + 34.562)) |
| = | 0.482947 | / | 0.472835 |
| | = | 1.0214 |
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) |
| = | (421.218 / 963.327) | / | (412.181 / 692.09) |
| = | 0.437253 | / | 0.59556 |
| | = | 0.7342 |
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) |
| = | ((1566.418 + 0) / 11555.251) | / | ((1222.342 + 0) / 8553.704) |
| = | 0.135559 | / | 0.142902 |
| | = | 0.9486 |
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 |
| = | (88.601 - 0 | - | 1082.543) | / | 11555.251 |
| | = | -0.086016 |
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.
Inter has a M-score of -1.85 suggests that the company is unlikely to be a manipulator.
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
Portfolio Contest
FRA:QN7 has been successfully added to your