PT Sinar Mas Multiartha Tbk 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 PT Sinar Mas Multiartha Tbk 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 * 1.0388 | + | 0.528 * 1 | + | 0.404 * 0.979 | + | 0.892 * 0.8108 | + | 0.115 * 1.0148 |
| - | 0.172 * SGAI | + | 4.679 * TATA | - | 0.327 * LVGI |
| - | 0.172 * 1.4035 | + | 4.679 * -0.062002 | - | 0.327 * 0.8961 |
| = | -2.95 |
* 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 Rp10,997,332 Mil.
Revenue was 6978683 + 7626125 + 4205640 + 6205389 = Rp25,015,837 Mil.
Gross Profit was 6978683 + 7626125 + 4205640 + 6205389 = Rp25,015,837 Mil.
Total Current Assets was Rp56,294,514 Mil.
Total Assets was Rp113,966,010 Mil.
Property, Plant and Equipment(Net PPE) was Rp3,385,213 Mil.
Depreciation, Depletion and Amortization(DDA) was Rp421,148 Mil.
Selling, General, & Admin. Expense(SGA) was Rp1,766,391 Mil.
Total Current Liabilities was Rp3,841,768 Mil.
Long-Term Debt & Capital Lease Obligation was Rp8,470,184 Mil.
Net Income was -269838 + 926909 + 217023 + 294852 = Rp1,168,946 Mil.
Non Operating Income was 526707 + 380191 + 179666 + 167077 = Rp1,253,641 Mil.
Cash Flow from Operations was 3927414 + 3491605 + 746364 + -1183987 = Rp6,981,396 Mil.
|
Total Receivables was Rp13,056,228 Mil.
Revenue was 6625897 + 9120299 + 7581883 + 7524533 = Rp30,852,612 Mil.
Gross Profit was 6625897 + 9120299 + 7581883 + 7524533 = Rp30,852,612 Mil.
Total Current Assets was Rp55,277,919 Mil.
Total Assets was Rp114,406,803 Mil.
Property, Plant and Equipment(Net PPE) was Rp3,463,881 Mil.
Depreciation, Depletion and Amortization(DDA) was Rp438,118 Mil.
Selling, General, & Admin. Expense(SGA) was Rp1,552,162 Mil.
Total Current Liabilities was Rp6,711,357 Mil.
Long-Term Debt & Capital Lease Obligation was Rp7,080,568 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) |
| = | (10997332 / 25015837) | / | (13056228 / 30852612) |
| = | 0.439615 | / | 0.423181 |
| | = | 1.0388 |
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) |
| = | (30852612 / 30852612) | / | (25015837 / 25015837) |
| = | 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 - (56294514 + 3385213) / 113966010) | / | (1 - (55277919 + 3463881) / 114406803) |
| = | 0.476337 | / | 0.486553 |
| | = | 0.979 |
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 |
| = | 25015837 | / | 30852612 |
| | = | 0.8108 |
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)) |
| = | (438118 / (438118 + 3463881)) | / | (421148 / (421148 + 3385213)) |
| = | 0.11228 | / | 0.110643 |
| | = | 1.0148 |
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) |
| = | (1766391 / 25015837) | / | (1552162 / 30852612) |
| = | 0.070611 | / | 0.050309 |
| | = | 1.4035 |
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) |
| = | ((8470184 + 3841768) / 113966010) | / | ((7080568 + 6711357) / 114406803) |
| = | 0.108032 | / | 0.120552 |
| | = | 0.8961 |
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 |
| = | (1168946 - 1253641 | - | 6981396) | / | 113966010 |
| | = | -0.062002 |
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.
PT Sinar Mas Multiartha Tbk has a M-score of -2.95 suggests that the company is unlikely to be a manipulator.
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